Correlation Between Definitive Healthcare and Streamline Health

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

Diversification Opportunities for Definitive Healthcare and Streamline Health

0.8

Correlation Coefficient

Definitive Healthcare  Streamline Health

Very poor diversification

The 3 months correlation between Definitive and Streamline is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and Streamline Health Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Streamline Health 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 Streamline Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Streamline Health has no effect on the direction of Definitive Healthcare i.e., Definitive Healthcare and Streamline Health go up and down completely randomly.

Pair Corralation between Definitive Healthcare and Streamline Health

Allowing for the 90-day total investment horizon Definitive Healthcare is expected to generate 2.28 times less return on investment than Streamline Health. But when comparing it to its historical volatility, Definitive Healthcare Corp is 3.34 times less risky than Streamline Health. It trades about 0.17 of its potential returns per unit of risk. Streamline Health Solutions is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  259.00  in Streamline Health Solutions on April 23, 2025 and sell it today you would earn a total of  271.00  from holding Streamline Health Solutions or generate 104.63% return on investment over 90 days.

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

Definitive Healthcare Corp  vs.  Streamline Health Solutions

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.

Streamline Health

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Streamline Health Solutions are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Streamline Health displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Definitive Healthcare and Streamline Health

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

The idea behind Definitive Healthcare Corp and Streamline Health Solutions 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.