Correlation Between CareMax and Sharecare
Can any of the company-specific risk be diversified away by investing in both CareMax and Sharecare 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 Sharecare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CareMax and Sharecare, you can compare the effects of market volatilities on CareMax and Sharecare 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 Sharecare. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareMax and Sharecare.
Diversification Opportunities for CareMax and Sharecare
Very good diversification
The 3 months correlation between CareMax and Sharecare is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CareMax and Sharecare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharecare 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 Sharecare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharecare has no effect on the direction of CareMax i.e., CareMax and Sharecare go up and down completely randomly.
Pair Corralation between CareMax and Sharecare
Assuming the 90 days horizon CareMax is expected to generate 21.95 times more return on investment than Sharecare. However, CareMax is 21.95 times more volatile than Sharecare. It trades about 0.13 of its potential returns per unit of risk. Sharecare is currently generating about 0.02 per unit of risk. If you would invest 58.00 in CareMax on September 14, 2024 and sell it today you would lose (57.04) from holding CareMax or give up 98.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 74.24% |
| Values | Daily Returns |
CareMax vs. Sharecare
Performance |
| Timeline |
| CareMax |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Sharecare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
CareMax and Sharecare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CareMax and Sharecare
The main advantage of trading using opposite CareMax and Sharecare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareMax position performs unexpectedly, Sharecare 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 Sharecare will offset losses from the drop in Sharecare's long position.The idea behind CareMax and Sharecare 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.| Sharecare vs. Privia Health Group | Sharecare vs. Evolent Health | Sharecare vs. HealthStream | Sharecare vs. Streamline Health Solutions |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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