Correlation Between Definitive Healthcare and HITHINK ROYALFLUSH

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Can any of the company-specific risk be diversified away by investing in both Definitive Healthcare and HITHINK ROYALFLUSH 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 Definitive Healthcare and HITHINK ROYALFLUSH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Definitive Healthcare Corp and HITHINK ROYALFLUSH, you can compare the effects of market volatilities on Definitive Healthcare and HITHINK ROYALFLUSH 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 Definitive Healthcare with a short position of HITHINK ROYALFLUSH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Definitive Healthcare and HITHINK ROYALFLUSH.

Diversification Opportunities for Definitive Healthcare and HITHINK ROYALFLUSH

0.46
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Definitive and HITHINK is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and HITHINK ROYALFLUSH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HITHINK ROYALFLUSH and Definitive 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 Definitive Healthcare Corp are associated (or correlated) with HITHINK ROYALFLUSH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HITHINK ROYALFLUSH has no effect on the direction of Definitive Healthcare i.e., Definitive Healthcare and HITHINK ROYALFLUSH go up and down completely randomly.

Pair Corralation between Definitive Healthcare and HITHINK ROYALFLUSH

Allowing for the 90-day total investment horizon Definitive Healthcare Corp is expected to under-perform the HITHINK ROYALFLUSH. In addition to that, Definitive Healthcare is 1.35 times more volatile than HITHINK ROYALFLUSH. It trades about -0.03 of its total potential returns per unit of risk. HITHINK ROYALFLUSH is currently generating about -0.02 per unit of volatility. If you would invest  13,712  in HITHINK ROYALFLUSH on May 12, 2022 and sell it today you would lose (5,144)  from holding HITHINK ROYALFLUSH or give up 37.51% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy58.91%
ValuesDaily Returns

Definitive Healthcare Corp  vs.  HITHINK ROYALFLUSH

 Performance (%) 
       Timeline  
Definitive Healthcare 
Definitive Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Definitive Healthcare Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Definitive Healthcare reported solid returns over the last few months and may actually be approaching a breakup point.

Definitive Price Channel

HITHINK ROYALFLUSH 
HITHINK Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in HITHINK ROYALFLUSH are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HITHINK ROYALFLUSH may actually be approaching a critical reversion point that can send shares even higher in September 2022.

HITHINK Price Channel

Definitive Healthcare and HITHINK ROYALFLUSH Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Definitive Healthcare and HITHINK ROYALFLUSH

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

HITHINK ROYALFLUSH

Pair trading matchups for HITHINK ROYALFLUSH

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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