Correlation Between Spectrum Technology and Definitive Healthcare

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

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

Diversification Opportunities for Spectrum Technology and Definitive Healthcare

-0.51

Correlation Coefficient

Spectrum Technology  Definitive Healthcare

Excellent diversification

The 3 months correlation between Spectrum and Definitive is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Spectrum Technology and Definitive Healthcare Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Definitive Healthcare and Spectrum Technology 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 Spectrum Technology are associated (or correlated) with Definitive Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Definitive Healthcare has no effect on the direction of Spectrum Technology i.e., Spectrum Technology and Definitive Healthcare go up and down completely randomly.

Pair Corralation between Spectrum Technology and Definitive Healthcare

Given the investment horizon of 90 days Spectrum Technology is expected to under-perform the Definitive Healthcare. In addition to that, Spectrum Technology is 4.39 times more volatile than Definitive Healthcare Corp. It trades about -0.13 of its total potential returns per unit of risk. Definitive Healthcare Corp is currently generating about 0.05 per unit of volatility. If you would invest  358.00  in Definitive Healthcare Corp on May 10, 2025 and sell it today you would earn a total of  27.00  from holding Definitive Healthcare Corp or generate 7.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Spectrum Technology  vs.  Definitive Healthcare Corp

Spectrum Technology

Risk-Adjusted Performance

Weakest

Over the last 90 days Spectrum Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Definitive Healthcare

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Definitive Healthcare Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Definitive Healthcare may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Spectrum Technology and Definitive Healthcare

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

The idea behind Spectrum Technology and Definitive Healthcare Corp 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.