Correlation Between Cerner Corp and Nextgen Healthcare
Can any of the company-specific risk be diversified away by investing in both Cerner Corp and Nextgen 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 Cerner Corp and Nextgen Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cerner Corp and Nextgen Healthcare, you can compare the effects of market volatilities on Cerner Corp and Nextgen 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 Cerner Corp with a short position of Nextgen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerner Corp and Nextgen Healthcare.
Diversification Opportunities for Cerner Corp and Nextgen Healthcare
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cerner and Nextgen is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cerner Corp and Nextgen Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextgen Healthcare and Cerner Corp 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 Cerner Corp are associated (or correlated) with Nextgen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextgen Healthcare has no effect on the direction of Cerner Corp i.e., Cerner Corp and Nextgen Healthcare go up and down completely randomly.
Pair Corralation between Cerner Corp and Nextgen Healthcare
If you would invest 2,394 in Nextgen Healthcare on December 29, 2023 and sell it today you would earn a total of 0.00 from holding Nextgen Healthcare or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cerner Corp vs. Nextgen Healthcare
Performance |
Timeline |
Cerner Corp |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Nextgen Healthcare |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Cerner Corp and Nextgen Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cerner Corp and Nextgen Healthcare
The main advantage of trading using opposite Cerner Corp and Nextgen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerner Corp position performs unexpectedly, Nextgen 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 Nextgen Healthcare will offset losses from the drop in Nextgen Healthcare's long position.Cerner Corp vs. Employers Holdings | Cerner Corp vs. Upper Street Marketing | Cerner Corp vs. Brp Group | Cerner Corp vs. Marsh McLennan Companies |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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