Correlation Between Premier and Nextgen Healthcare
Can any of the company-specific risk be diversified away by investing in both Premier 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 Premier and Nextgen Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier and Nextgen Healthcare, you can compare the effects of market volatilities on Premier 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 Premier with a short position of Nextgen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier and Nextgen Healthcare.
Diversification Opportunities for Premier and Nextgen Healthcare
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Premier and Nextgen is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Premier and Nextgen Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextgen Healthcare and Premier 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 Premier 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 Premier i.e., Premier and Nextgen Healthcare go up and down completely randomly.
Pair Corralation between Premier and Nextgen Healthcare
Given the investment horizon of 90 days Premier is expected to generate 1.21 times more return on investment than Nextgen Healthcare. However, Premier is 1.21 times more volatile than Nextgen Healthcare. It trades about -0.03 of its potential returns per unit of risk. Nextgen Healthcare is currently generating about -0.07 per unit of risk. If you would invest 3,064 in Premier on October 20, 2024 and sell it today you would lose (821.00) from holding Premier or give up 26.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 24.65% |
| Values | Daily Returns |
Premier vs. Nextgen Healthcare
Performance |
| Timeline |
| Premier |
| Nextgen Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Premier and Nextgen Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier and Nextgen Healthcare
The main advantage of trading using opposite Premier and Nextgen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier 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.| Premier vs. National Research Corp | Premier vs. Definitive Healthcare Corp | Premier vs. HealthStream | Premier vs. Privia Health Group |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |