Correlation Between Exxon and Nextgen Healthcare
Can any of the company-specific risk be diversified away by investing in both Exxon 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 Exxon and Nextgen Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxon Mobil Corp and Nextgen Healthcare, you can compare the effects of market volatilities on Exxon 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 Exxon with a short position of Nextgen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Nextgen Healthcare.
Diversification Opportunities for Exxon and Nextgen Healthcare
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and Nextgen is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Nextgen Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextgen Healthcare and Exxon 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 Exxon Mobil Corp 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 Exxon i.e., Exxon and Nextgen Healthcare go up and down completely randomly.
Pair Corralation between Exxon and Nextgen Healthcare
If you would invest 11,764 in Exxon Mobil Corp on September 3, 2024 and sell it today you would earn a total of 32.00 from holding Exxon Mobil Corp or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Nextgen Healthcare
Performance |
| Timeline |
| Exxon Mobil Corp |
| Nextgen Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Exxon and Nextgen Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Nextgen Healthcare
The main advantage of trading using opposite Exxon and Nextgen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon 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 Exxon Mobil Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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