Correlation Between DocGo and ModivCare
Can any of the company-specific risk be diversified away by investing in both DocGo and ModivCare 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 DocGo and ModivCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DocGo Inc and ModivCare, you can compare the effects of market volatilities on DocGo and ModivCare 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 DocGo with a short position of ModivCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of DocGo and ModivCare.
Diversification Opportunities for DocGo and ModivCare
Average diversification
The 3 months correlation between DocGo and ModivCare is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding DocGo Inc and ModivCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ModivCare and DocGo 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 DocGo Inc are associated (or correlated) with ModivCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ModivCare has no effect on the direction of DocGo i.e., DocGo and ModivCare go up and down completely randomly.
Pair Corralation between DocGo and ModivCare
Given the investment horizon of 90 days DocGo Inc is expected to generate 0.63 times more return on investment than ModivCare. However, DocGo Inc is 1.6 times less risky than ModivCare. It trades about 0.03 of its potential returns per unit of risk. ModivCare is currently generating about 0.0 per unit of risk. If you would invest 390.00 in DocGo Inc on September 1, 2024 and sell it today you would earn a total of 43.00 from holding DocGo Inc or generate 11.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DocGo Inc vs. ModivCare
Performance |
| Timeline |
| DocGo Inc |
| ModivCare |
DocGo and ModivCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DocGo and ModivCare
The main advantage of trading using opposite DocGo and ModivCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DocGo position performs unexpectedly, ModivCare 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 ModivCare will offset losses from the drop in ModivCare's long position.The idea behind DocGo Inc and ModivCare 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.| ModivCare vs. The Ensign Group | ModivCare vs. Select Medical Holdings | ModivCare vs. Encompass Health Corp | ModivCare vs. InnovAge Holding 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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