Correlation Between Viemed Healthcare and Hawkins

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

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

Diversification Opportunities for Viemed Healthcare and Hawkins

0.17

Correlation Coefficient

Viemed Healthcare  Hawkins

Average diversification

The 3 months correlation between Viemed and Hawkins is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins and Viemed 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 Viemed Healthcare are associated (or correlated) with Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and Hawkins go up and down completely randomly.

Pair Corralation between Viemed Healthcare and Hawkins

Considering the 90-day investment horizon Viemed Healthcare is expected to generate 0.78 times more return on investment than Hawkins. However, Viemed Healthcare is 1.29 times less risky than Hawkins. It trades about 0.18 of its potential returns per unit of risk. Hawkins is currently generating about 0.05 per unit of risk. If you would invest  731.00  in Viemed Healthcare on August 17, 2024 and sell it today you would earn a total of  175.00  from holding Viemed Healthcare or generate 23.94% return on investment over 90 days.

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

Viemed Healthcare  vs.  Hawkins

Viemed Healthcare

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Viemed Healthcare are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, Viemed Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hawkins

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hawkins are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting forward-looking signals, Hawkins may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Viemed Healthcare and Hawkins

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

The idea behind Viemed Healthcare and Hawkins 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.