Correlation Between R1 RCM and Progyny

Can any of the company-specific risk be diversified away by investing in both R1 RCM 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 R1 RCM and Progyny into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between R1 RCM Inc and Progyny, you can compare the effects of market volatilities on R1 RCM 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 R1 RCM with a short position of Progyny. Check out your portfolio center. Please also check ongoing floating volatility patterns of R1 RCM and Progyny.

Diversification Opportunities for R1 RCM and Progyny

-0.64

Correlation Coefficient

R1 RCM  Progyny

Excellent diversification

The 3 months correlation between RCM and Progyny is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding R1 RCM Inc and Progyny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progyny and R1 RCM 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 R1 RCM Inc 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 R1 RCM i.e., R1 RCM and Progyny go up and down completely randomly.

Pair Corralation between R1 RCM and Progyny

Considering the 90-day investment horizon R1 RCM is expected to generate 13.94 times less return on investment than Progyny. But when comparing it to its historical volatility, R1 RCM Inc is 74.63 times less risky than Progyny. It trades about 0.58 of its potential returns per unit of risk. Progyny is currently generating about 0.11 of returns per unit of risk over similar time horizon. 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 Against
Strength	Weak
Accuracy	14.29%
Values	Daily Returns

R1 RCM Inc  vs.  Progyny

R1 RCM Inc

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days R1 RCM Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, R1 RCM is not utilizing all of its potentials. The current 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 R1 RCM and Progyny

The main advantage of trading using opposite R1 RCM and Progyny positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if R1 RCM 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 R1 RCM Inc 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.