Correlation Between Veeva Systems and Astrana Health

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

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

Diversification Opportunities for Veeva Systems and Astrana Health

-0.69

Correlation Coefficient

Veeva Systems  Astrana Health

Excellent diversification

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

Pair Corralation between Veeva Systems and Astrana Health

Given the investment horizon of 90 days Veeva Systems Class is expected to generate 1.43 times more return on investment than Astrana Health. However, Veeva Systems is 1.43 times more volatile than Astrana Health. It trades about -0.06 of its potential returns per unit of risk. Astrana Health is currently generating about -0.57 per unit of risk. If you would invest  22,695  in Veeva Systems Class on September 25, 2024 and sell it today you would lose (952.00) from holding Veeva Systems Class or give up 4.19% of portfolio value over 90 days.

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

Veeva Systems Class  vs.  Astrana Health

Veeva Systems Class

Risk-Adjusted Performance

4 of 100

Modest

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

Astrana Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astrana Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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 recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Veeva Systems and Astrana Health

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

The idea behind Veeva Systems Class and Astrana Health 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.