Correlation Between Definitive Healthcare and IRIDEX

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

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

Diversification Opportunities for Definitive Healthcare and IRIDEX

-0.58

Correlation Coefficient

Definitive Healthcare  IRIDEX

Excellent diversification

The 3 months correlation between Definitive and IRIDEX is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and IRIDEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRIDEX and Definitive Healthcare 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 Definitive Healthcare Corp are associated (or correlated) with IRIDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRIDEX has no effect on the direction of Definitive Healthcare i.e., Definitive Healthcare and IRIDEX go up and down completely randomly.

Pair Corralation between Definitive Healthcare and IRIDEX

Allowing for the 90-day total investment horizon Definitive Healthcare Corp is expected to under-perform the IRIDEX. But the stock apears to be less risky and, when comparing its historical volatility, Definitive Healthcare Corp is 1.19 times less risky than IRIDEX. The stock trades about -0.03 of its potential returns per unit of risk. The IRIDEX is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  202.00  in IRIDEX on April 18, 2025 and sell it today you would lose (95.00) from holding IRIDEX or give up 47.03% of portfolio value over 90 days.

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

Definitive Healthcare Corp  vs.  IRIDEX

Definitive Healthcare

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Definitive Healthcare Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Definitive Healthcare demonstrated solid returns over the last few months and may actually be approaching a breakup point.

IRIDEX

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IRIDEX are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, IRIDEX may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Definitive Healthcare and IRIDEX

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

The idea behind Definitive Healthcare Corp and IRIDEX 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.