Correlation Between Streamline Health and Spok Holdings

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

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

Diversification Opportunities for Streamline Health and Spok Holdings

-0.29

Correlation Coefficient

Streamline Health  Spok Holdings

Very good diversification

The 3 months correlation between Streamline and Spok is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Streamline Health Solutions and Spok Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spok Holdings and Streamline 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 Streamline Health Solutions are associated (or correlated) with Spok Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spok Holdings has no effect on the direction of Streamline Health i.e., Streamline Health and Spok Holdings go up and down completely randomly.

Pair Corralation between Streamline Health and Spok Holdings

Given the investment horizon of 90 days Streamline Health Solutions is expected to under-perform the Spok Holdings. In addition to that, Streamline Health is 8.24 times more volatile than Spok Holdings. It trades about -0.08 of its total potential returns per unit of risk. Spok Holdings is currently generating about 0.16 per unit of volatility. If you would invest  1,444  in Spok Holdings on August 31, 2024 and sell it today you would earn a total of  203.00  from holding Spok Holdings or generate 14.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Streamline Health Solutions  vs.  Spok Holdings

Streamline Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Streamline Health Solutions 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 very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Spok Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Spok Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Spok Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Streamline Health and Spok Holdings

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

The idea behind Streamline Health Solutions and Spok Holdings 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..