Correlation Between CareMax and DIAGNOS
Can any of the company-specific risk be diversified away by investing in both CareMax and DIAGNOS 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 DIAGNOS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CareMax and DIAGNOS, you can compare the effects of market volatilities on CareMax and DIAGNOS 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 DIAGNOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareMax and DIAGNOS.
Diversification Opportunities for CareMax and DIAGNOS
Average diversification
The 3 months correlation between CareMax and DIAGNOS is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CareMax and DIAGNOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIAGNOS 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 DIAGNOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIAGNOS has no effect on the direction of CareMax i.e., CareMax and DIAGNOS go up and down completely randomly.
Pair Corralation between CareMax and DIAGNOS
Given the investment horizon of 90 days CareMax is expected to generate 11.55 times more return on investment than DIAGNOS. However, CareMax is 11.55 times more volatile than DIAGNOS. It trades about 0.06 of its potential returns per unit of risk. DIAGNOS is currently generating about 0.18 per unit of risk. If you would invest 2.40 in CareMax on October 24, 2024 and sell it today you would lose (2.18) from holding CareMax or give up 90.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CareMax vs. DIAGNOS
Performance |
| Timeline |
| CareMax |
| DIAGNOS |
CareMax and DIAGNOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CareMax and DIAGNOS
The main advantage of trading using opposite CareMax and DIAGNOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareMax position performs unexpectedly, DIAGNOS 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 DIAGNOS will offset losses from the drop in DIAGNOS's long position.| CareMax vs. Evolent Health | CareMax vs. Certara | CareMax vs. Privia Health Group | CareMax vs. HealthStream |
| DIAGNOS vs. Cogstate Limited | DIAGNOS vs. Cognetivity Neurosciences | DIAGNOS vs. CareMax | DIAGNOS vs. Mednow Inc |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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