Correlation Between Cue Health and Premier

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

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

Diversification Opportunities for Cue Health and Premier

-0.69

Correlation Coefficient

Cue Health  Premier

Excellent diversification

The 3 months correlation between Cue and Premier is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Cue Health and Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier and Cue Health 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 Cue Health are associated (or correlated) with Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier has no effect on the direction of Cue Health i.e., Cue Health and Premier go up and down completely randomly.

Pair Corralation between Cue Health and Premier

If you would invest  2,034  in Premier on September 17, 2024 and sell it today you would earn a total of  145.00  from holding Premier or generate 7.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

Cue Health  vs.  Premier

Cue Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cue Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Cue Health is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Premier

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Premier are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Premier may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cue Health and Premier

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

The idea behind Cue Health and Premier 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.