Correlation Between Certara and Veradigm

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

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

Diversification Opportunities for Certara and Veradigm

0.01

Correlation Coefficient

Certara  Veradigm

Significant diversification

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

Pair Corralation between Certara and Veradigm

Given the investment horizon of 90 days Certara is expected to under-perform the Veradigm. In addition to that, Certara is 1.84 times more volatile than Veradigm. It trades about -0.03 of its total potential returns per unit of risk. Veradigm is currently generating about 0.28 per unit of volatility. If you would invest  1,174  in Veradigm on September 1, 2024 and sell it today you would earn a total of  159.00  from holding Veradigm or generate 13.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	8.33%
Values	Daily Returns

Certara  vs.  Veradigm

Certara

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Certara has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Certara is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Veradigm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veradigm has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Veradigm is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Certara and Veradigm

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

The idea behind Certara and Veradigm 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 CEOs Directory module to screen CEOs from public companies around the world.