Correlation Between IQVIA Holdings and Natera

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

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

Diversification Opportunities for IQVIA Holdings and Natera

-0.79

Correlation Coefficient

IQVIA Holdings  Natera

Pay attention - limited upside

The 3 months correlation between IQVIA and Natera is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding IQVIA Holdings and Natera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natera Inc and IQVIA Holdings 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 IQVIA Holdings are associated (or correlated) with Natera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natera Inc has no effect on the direction of IQVIA Holdings i.e., IQVIA Holdings and Natera go up and down completely randomly.

Pair Corralation between IQVIA Holdings and Natera

Considering the 90-day investment horizon IQVIA Holdings is expected to under-perform the Natera. But the stock apears to be less risky and, when comparing its historical volatility, IQVIA Holdings is 1.8 times less risky than Natera. The stock trades about -0.15 of its potential returns per unit of risk. The Natera Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  12,354  in Natera Inc on September 21, 2024 and sell it today you would earn a total of  3,838  from holding Natera Inc or generate 31.07% return on investment over 90 days.

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

IQVIA Holdings  vs.  Natera Inc

IQVIA Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQVIA Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Natera Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Natera Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Natera sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IQVIA Holdings and Natera

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

The idea behind IQVIA Holdings and Natera Inc 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .