Correlation Between Definitive Healthcare and Pro Dex

Can any of the company-specific risk be diversified away by investing in both Definitive Healthcare and Pro Dex 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 Pro Dex 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 Pro Dex, you can compare the effects of market volatilities on Definitive Healthcare and Pro Dex 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 Pro Dex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Definitive Healthcare and Pro Dex.

Diversification Opportunities for Definitive Healthcare and Pro Dex

-0.59

Correlation Coefficient

Definitive Healthcare  Pro Dex

Excellent diversification

The 3 months correlation between Definitive and Pro is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and Pro Dex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Dex 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 Pro Dex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Dex has no effect on the direction of Definitive Healthcare i.e., Definitive Healthcare and Pro Dex go up and down completely randomly.

Pair Corralation between Definitive Healthcare and Pro Dex

Allowing for the 90-day total investment horizon Definitive Healthcare Corp is expected to generate 0.91 times more return on investment than Pro Dex. However, Definitive Healthcare Corp is 1.1 times less risky than Pro Dex. It trades about 0.17 of its potential returns per unit of risk. Pro Dex is currently generating about -0.05 per unit of risk. If you would invest  271.00  in Definitive Healthcare Corp on April 24, 2025 and sell it today you would earn a total of  148.00  from holding Definitive Healthcare Corp or generate 54.61% return on investment over 90 days.

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

Definitive Healthcare Corp  vs.  Pro Dex

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.

Pro Dex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pro Dex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Definitive Healthcare and Pro Dex

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

The idea behind Definitive Healthcare Corp and Pro Dex 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.