Correlation Between CareCloud and CareMax
Can any of the company-specific risk be diversified away by investing in both CareCloud and CareMax 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 CareCloud and CareMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CareCloud and CareMax, you can compare the effects of market volatilities on CareCloud and CareMax 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 CareCloud with a short position of CareMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareCloud and CareMax.
Diversification Opportunities for CareCloud and CareMax
Very good diversification
The 3 months correlation between CareCloud and CareMax is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding CareCloud and CareMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareMax and CareCloud 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 CareCloud are associated (or correlated) with CareMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareMax has no effect on the direction of CareCloud i.e., CareCloud and CareMax go up and down completely randomly.
Pair Corralation between CareCloud and CareMax
Given the investment horizon of 90 days CareCloud is expected to generate 0.59 times more return on investment than CareMax. However, CareCloud is 1.69 times less risky than CareMax. It trades about 0.22 of its potential returns per unit of risk. CareMax is currently generating about -0.49 per unit of risk. If you would invest 234.00 in CareCloud on August 31, 2024 and sell it today you would earn a total of 82.00 from holding CareCloud or generate 35.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CareCloud vs. CareMax
Performance |
| Timeline |
| CareCloud |
| CareMax |
CareCloud and CareMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CareCloud and CareMax
The main advantage of trading using opposite CareCloud and CareMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareCloud position performs unexpectedly, CareMax 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 CareMax will offset losses from the drop in CareMax's long position.| CareCloud vs. Evolent Health | CareCloud vs. Simulations Plus | CareCloud vs. Privia Health Group | CareCloud vs. HealthStream |
| CareMax vs. Privia Health Group | CareMax vs. HealthStream | CareMax vs. Certara | CareMax vs. National Research Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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