Correlation Between Cogstate and CareMax
Can any of the company-specific risk be diversified away by investing in both Cogstate 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 Cogstate and CareMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogstate Limited and CareMax, you can compare the effects of market volatilities on Cogstate 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 Cogstate with a short position of CareMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogstate and CareMax.
Diversification Opportunities for Cogstate and CareMax
Modest diversification
The 3 months correlation between Cogstate and CareMax is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cogstate Limited and CareMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareMax and Cogstate 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 Cogstate Limited 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 Cogstate i.e., Cogstate and CareMax go up and down completely randomly.
Pair Corralation between Cogstate and CareMax
Assuming the 90 days horizon Cogstate Limited is expected to generate 0.14 times more return on investment than CareMax. However, Cogstate Limited is 7.33 times less risky than CareMax. It trades about 0.01 of its potential returns per unit of risk. CareMax is currently generating about -0.3 per unit of risk. If you would invest 64.00 in Cogstate Limited on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Cogstate Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogstate Limited vs. CareMax
Performance |
| Timeline |
| Cogstate Limited |
| CareMax |
Cogstate and CareMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogstate and CareMax
The main advantage of trading using opposite Cogstate and CareMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogstate 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.| Cogstate vs. Caduceus Software Systems | Cogstate vs. Cloud DX | Cogstate vs. Cognetivity Neurosciences | Cogstate vs. Healthcare Integrated Technologies |
| CareMax vs. Evolent Health | CareMax vs. Certara | CareMax vs. Privia Health Group | CareMax vs. HealthStream |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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