Correlation Between FOXO Technologies and HealthStream

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

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

Diversification Opportunities for FOXO Technologies and HealthStream

0.59

Correlation Coefficient

FOXO Technologies  HealthStream

Very weak diversification

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

Pair Corralation between FOXO Technologies and HealthStream

Given the investment horizon of 90 days FOXO Technologies is expected to under-perform the HealthStream. In addition to that, FOXO Technologies is 6.71 times more volatile than HealthStream. It trades about -0.02 of its total potential returns per unit of risk. HealthStream is currently generating about 0.03 per unit of volatility. If you would invest  2,357  in HealthStream on July 25, 2024 and sell it today you would earn a total of  506.00  from holding HealthStream or generate 21.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

FOXO Technologies  vs.  HealthStream

FOXO Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FOXO Technologies 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 very healthy which may send shares a bit higher in November 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

HealthStream

Risk-Adjusted Performance

0 of 100

Insignificant

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

Pair Trading with FOXO Technologies and HealthStream

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

The idea behind FOXO Technologies and HealthStream 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.