Correlation Between R1 RCM and HealthStream
Can any of the company-specific risk be diversified away by investing in both R1 RCM and HealthStream 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 R1 RCM and HealthStream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between R1 RCM Inc and HealthStream, you can compare the effects of market volatilities on R1 RCM and HealthStream 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 R1 RCM with a short position of HealthStream. Check out your portfolio center. Please also check ongoing floating volatility patterns of R1 RCM and HealthStream.
Diversification Opportunities for R1 RCM and HealthStream
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RCM and HealthStream is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding R1 RCM Inc and HealthStream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealthStream and R1 RCM 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 R1 RCM Inc are associated (or correlated) with HealthStream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealthStream has no effect on the direction of R1 RCM i.e., R1 RCM and HealthStream go up and down completely randomly.
Pair Corralation between R1 RCM and HealthStream
Considering the 90-day investment horizon R1 RCM is expected to generate 22.32 times less return on investment than HealthStream. But when comparing it to its historical volatility, R1 RCM Inc is 34.8 times less risky than HealthStream. It trades about 0.5 of its potential returns per unit of risk. HealthStream is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,892 in HealthStream on August 29, 2024 and sell it today you would earn a total of 362.00 from holding HealthStream or generate 12.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.27% |
| Values | Daily Returns |
R1 RCM Inc vs. HealthStream
Performance |
| Timeline |
| R1 RCM Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| HealthStream |
R1 RCM and HealthStream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with R1 RCM and HealthStream
The main advantage of trading using opposite R1 RCM and HealthStream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if R1 RCM position performs unexpectedly, HealthStream 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 HealthStream will offset losses from the drop in HealthStream's long position.| R1 RCM vs. National Research Corp | R1 RCM vs. Definitive Healthcare Corp | R1 RCM vs. HealthStream | R1 RCM vs. Evolent Health |
| HealthStream vs. National Research Corp | HealthStream vs. Forian Inc | HealthStream vs. Streamline Health Solutions | HealthStream vs. Definitive Healthcare Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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