Correlation Between HealthEquity and Think Research

Can any of the company-specific risk be diversified away by investing in both HealthEquity and Think Research 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 HealthEquity and Think Research into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HealthEquity and Think Research, you can compare the effects of market volatilities on HealthEquity and Think Research 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 HealthEquity with a short position of Think Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of HealthEquity and Think Research.

Diversification Opportunities for HealthEquity and Think Research

0.61

Correlation Coefficient

HealthEquity  Think Research

Poor diversification

The 3 months correlation between HealthEquity and Think is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding HealthEquity and Think Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Think Research and HealthEquity 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 HealthEquity are associated (or correlated) with Think Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Think Research has no effect on the direction of HealthEquity i.e., HealthEquity and Think Research go up and down completely randomly.

Pair Corralation between HealthEquity and Think Research

If you would invest  7,938  in HealthEquity on January 24, 2024 and sell it today you would earn a total of  181.00  from holding HealthEquity or generate 2.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

HealthEquity  vs.  Think Research

HealthEquity

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HealthEquity are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, HealthEquity may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Think Research

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Think Research are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady forward-looking signals, Think Research reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HealthEquity and Think Research

The main advantage of trading using opposite HealthEquity and Think Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HealthEquity position performs unexpectedly, Think Research 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 Think Research will offset losses from the drop in Think Research's long position.

The idea behind HealthEquity and Think Research 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..