Correlation Between Nextgen Healthcare and Progyny

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

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

Diversification Opportunities for Nextgen Healthcare and Progyny

0.64

Correlation Coefficient

Nextgen Healthcare  Progyny

Poor diversification

The 3 months correlation between Nextgen and Progyny is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Nextgen Healthcare and Progyny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progyny and Nextgen 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 Nextgen Healthcare are associated (or correlated) with Progyny. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progyny has no effect on the direction of Nextgen Healthcare i.e., Nextgen Healthcare and Progyny go up and down completely randomly.

Pair Corralation between Nextgen Healthcare and Progyny

If you would invest  1,377  in Progyny on September 16, 2024 and sell it today you would earn a total of  84.00  from holding Progyny or generate 6.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Nextgen Healthcare  vs.  Progyny

Nextgen Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nextgen Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Nextgen Healthcare is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Progyny

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Progyny has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Nextgen Healthcare and Progyny

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

The idea behind Nextgen Healthcare and Progyny 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 Correlations module to find global opportunities by holding instruments from different markets.