Correlation Between Viemed Healthcare and LENNAR

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

By analyzing existing cross correlation between Viemed Healthcare and LENNAR P 525, you can compare the effects of market volatilities on Viemed Healthcare and LENNAR 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 Viemed Healthcare with a short position of LENNAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viemed Healthcare and LENNAR.

Diversification Opportunities for Viemed Healthcare and LENNAR

-0.36

Correlation Coefficient

Viemed Healthcare  LENNAR

Very good diversification

The 3 months correlation between Viemed and LENNAR is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and LENNAR P 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENNAR P 525 and Viemed 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 Viemed Healthcare are associated (or correlated) with LENNAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENNAR P 525 has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and LENNAR go up and down completely randomly.

Pair Corralation between Viemed Healthcare and LENNAR

Considering the 90-day investment horizon Viemed Healthcare is expected to generate 8.26 times more return on investment than LENNAR. However, Viemed Healthcare is 8.26 times more volatile than LENNAR P 525. It trades about 0.1 of its potential returns per unit of risk. LENNAR P 525 is currently generating about -0.09 per unit of risk. If you would invest  711.00  in Viemed Healthcare on September 25, 2024 and sell it today you would earn a total of  89.00  from holding Viemed Healthcare or generate 12.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.19%
Values	Daily Returns

Viemed Healthcare  vs.  LENNAR P 525

Viemed Healthcare

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Viemed Healthcare are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent primary indicators, Viemed Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

LENNAR P 525

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LENNAR P 525 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LENNAR is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Viemed Healthcare and LENNAR

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

The idea behind Viemed Healthcare and LENNAR P 525 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 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..