Correlation Between CareMax and Cogstate
Can any of the company-specific risk be diversified away by investing in both CareMax and Cogstate 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 CareMax and Cogstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CareMax and Cogstate Limited, you can compare the effects of market volatilities on CareMax and Cogstate 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 CareMax with a short position of Cogstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareMax and Cogstate.
Diversification Opportunities for CareMax and Cogstate
Very weak diversification
The 3 months correlation between CareMax and Cogstate is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CareMax and Cogstate Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogstate Limited and CareMax 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 CareMax are associated (or correlated) with Cogstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogstate Limited has no effect on the direction of CareMax i.e., CareMax and Cogstate go up and down completely randomly.
Pair Corralation between CareMax and Cogstate
Given the investment horizon of 90 days CareMax is expected to under-perform the Cogstate. In addition to that, CareMax is 3.25 times more volatile than Cogstate Limited. It trades about -0.02 of its total potential returns per unit of risk. Cogstate Limited is currently generating about -0.01 per unit of volatility. If you would invest 127.00 in Cogstate Limited on August 27, 2024 and sell it today you would lose (63.00) from holding Cogstate Limited or give up 49.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CareMax vs. Cogstate Limited
Performance |
| Timeline |
| CareMax |
| Cogstate Limited |
CareMax and Cogstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CareMax and Cogstate
The main advantage of trading using opposite CareMax and Cogstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareMax position performs unexpectedly, Cogstate 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 Cogstate will offset losses from the drop in Cogstate's long position.The idea behind CareMax and Cogstate Limited 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.| Cogstate vs. GE HealthCare Technologies | Cogstate vs. Veeva Systems Class | Cogstate vs. Solventum Corp | Cogstate vs. HealthEquity |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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