Correlation Between Laboratory and NeueHealth

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

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

Diversification Opportunities for Laboratory and NeueHealth

0.02

Correlation Coefficient

Laboratory  NeueHealth

Significant diversification

The 3 months correlation between Laboratory and NeueHealth is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Laboratory of and NeueHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeueHealth and Laboratory 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 Laboratory of are associated (or correlated) with NeueHealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeueHealth has no effect on the direction of Laboratory i.e., Laboratory and NeueHealth go up and down completely randomly.

Pair Corralation between Laboratory and NeueHealth

Allowing for the 90-day total investment horizon Laboratory of is expected to generate 2.01 times more return on investment than NeueHealth. However, Laboratory is 2.01 times more volatile than NeueHealth. It trades about 0.09 of its potential returns per unit of risk. NeueHealth is currently generating about -0.01 per unit of risk. If you would invest  24,321  in Laboratory of on May 6, 2025 and sell it today you would earn a total of  2,064  from holding Laboratory of or generate 8.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Laboratory of  vs.  NeueHealth

Laboratory

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Laboratory of are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Laboratory may actually be approaching a critical reversion point that can send shares even higher in September 2025.

NeueHealth

Risk-Adjusted Performance

Very Weak

Over the last 90 days NeueHealth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, NeueHealth is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Laboratory and NeueHealth

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

The idea behind Laboratory of and NeueHealth 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.