Correlation Between M3 and Nextgen Healthcare
Can any of the company-specific risk be diversified away by investing in both M3 and Nextgen Healthcare at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining M3 and Nextgen Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M3 Inc and Nextgen Healthcare, you can compare the effects of market volatilities on M3 and Nextgen Healthcare and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in M3 with a short position of Nextgen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of M3 and Nextgen Healthcare.
Diversification Opportunities for M3 and Nextgen Healthcare
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between M3 and Nextgen is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding M3 Inc and Nextgen Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextgen Healthcare and M3 is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on M3 Inc are associated (or correlated) with Nextgen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextgen Healthcare has no effect on the direction of M3 i.e., M3 and Nextgen Healthcare go up and down completely randomly.
Pair Corralation between M3 and Nextgen Healthcare
If you would invest 1,003 in M3 Inc on September 2, 2024 and sell it today you would earn a total of 15.00 from holding M3 Inc or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
M3 Inc vs. Nextgen Healthcare
Performance |
| Timeline |
| M3 Inc |
| Nextgen Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
M3 and Nextgen Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M3 and Nextgen Healthcare
The main advantage of trading using opposite M3 and Nextgen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M3 position performs unexpectedly, Nextgen Healthcare can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nextgen Healthcare will offset losses from the drop in Nextgen Healthcare's long position.The idea behind M3 Inc and Nextgen Healthcare pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nextgen Healthcare vs. National Research Corp | Nextgen Healthcare vs. Definitive Healthcare Corp | Nextgen Healthcare vs. HealthStream | Nextgen Healthcare vs. Forian Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |