Correlation Between National Research and TruBridge

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

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

Diversification Opportunities for National Research and TruBridge

-0.4

Correlation Coefficient

National Research  TruBridge

Very good diversification

The 3 months correlation between National and TruBridge is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding National Research Corp and TruBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TruBridge and National Research 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 National Research Corp are associated (or correlated) with TruBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TruBridge has no effect on the direction of National Research i.e., National Research and TruBridge go up and down completely randomly.

Pair Corralation between National Research and TruBridge

Considering the 90-day investment horizon National Research Corp is expected to under-perform the TruBridge. In addition to that, National Research is 1.1 times more volatile than TruBridge. It trades about -0.53 of its total potential returns per unit of risk. TruBridge is currently generating about -0.2 per unit of volatility. If you would invest  2,264  in TruBridge on May 6, 2025 and sell it today you would lose (210.00) from holding TruBridge or give up 9.28% of portfolio value over 90 days.

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

National Research Corp  vs.  TruBridge

National Research Corp

Risk-Adjusted Performance

Very Weak

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

TruBridge

Risk-Adjusted Performance

Very Weak

Over the last 90 days TruBridge has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with National Research and TruBridge

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

The idea behind National Research Corp and TruBridge 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..