Correlation Between National Research and Goodrx HoldingsInc

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

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

Diversification Opportunities for National Research and Goodrx HoldingsInc

-0.01

Correlation Coefficient

National Research  Goodrx HoldingsInc

Good diversification

The 3 months correlation between National and Goodrx is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding National Research Corp and Goodrx HoldingsInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodrx HoldingsInc and National Research 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 National Research Corp are associated (or correlated) with Goodrx HoldingsInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodrx HoldingsInc has no effect on the direction of National Research i.e., National Research and Goodrx HoldingsInc go up and down completely randomly.

Pair Corralation between National Research and Goodrx HoldingsInc

Considering the 90-day investment horizon National Research Corp is expected to under-perform the Goodrx HoldingsInc. In addition to that, National Research is 1.02 times more volatile than Goodrx HoldingsInc. It trades about -0.05 of its total potential returns per unit of risk. Goodrx HoldingsInc is currently generating about 0.14 per unit of volatility. If you would invest  666.00  in Goodrx HoldingsInc on February 20, 2024 and sell it today you would earn a total of  82.00  from holding Goodrx HoldingsInc or generate 12.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

National Research Corp  vs.  Goodrx HoldingsInc

National Research Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Research Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Goodrx HoldingsInc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goodrx HoldingsInc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Goodrx HoldingsInc showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Research and Goodrx HoldingsInc

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

The idea behind National Research Corp and Goodrx HoldingsInc 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.