Correlation Between CareRay Digital and Innovative Medical

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Can any of the company-specific risk be diversified away by investing in both CareRay Digital and Innovative Medical 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 CareRay Digital and Innovative Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CareRay Digital Medical and Innovative Medical Management, you can compare the effects of market volatilities on CareRay Digital and Innovative Medical 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 CareRay Digital with a short position of Innovative Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareRay Digital and Innovative Medical.

Diversification Opportunities for CareRay Digital and Innovative Medical

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between CareRay and Innovative is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding CareRay Digital Medical and Innovative Medical Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Medical and CareRay Digital 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 CareRay Digital Medical are associated (or correlated) with Innovative Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Medical has no effect on the direction of CareRay Digital i.e., CareRay Digital and Innovative Medical go up and down completely randomly.

Pair Corralation between CareRay Digital and Innovative Medical

Assuming the 90 days trading horizon CareRay Digital Medical is expected to generate 0.55 times more return on investment than Innovative Medical. However, CareRay Digital Medical is 1.82 times less risky than Innovative Medical. It trades about 0.01 of its potential returns per unit of risk. Innovative Medical Management is currently generating about -0.15 per unit of risk. If you would invest  1,405  in CareRay Digital Medical on October 23, 2024 and sell it today you would earn a total of  1.00  from holding CareRay Digital Medical or generate 0.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

CareRay Digital Medical  vs.  Innovative Medical Management

 Performance 
       Timeline  
CareRay Digital Medical 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in CareRay Digital Medical are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CareRay Digital may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Innovative Medical 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Innovative Medical Management are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Innovative Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

CareRay Digital and Innovative Medical Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CareRay Digital and Innovative Medical

The main advantage of trading using opposite CareRay Digital and Innovative Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareRay Digital position performs unexpectedly, Innovative Medical 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 Innovative Medical will offset losses from the drop in Innovative Medical's long position.
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The idea behind CareRay Digital Medical and Innovative Medical Management 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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