Correlation Between Fortress Biotech and CareCloud
Can any of the company-specific risk be diversified away by investing in both Fortress Biotech and CareCloud 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 Fortress Biotech and CareCloud into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Biotech Pref and CareCloud, you can compare the effects of market volatilities on Fortress Biotech and CareCloud 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 Fortress Biotech with a short position of CareCloud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Biotech and CareCloud.
Diversification Opportunities for Fortress Biotech and CareCloud
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fortress and CareCloud is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Biotech Pref and CareCloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareCloud and Fortress Biotech 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 Fortress Biotech Pref are associated (or correlated) with CareCloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareCloud has no effect on the direction of Fortress Biotech i.e., Fortress Biotech and CareCloud go up and down completely randomly.
Pair Corralation between Fortress Biotech and CareCloud
Assuming the 90 days horizon Fortress Biotech Pref is expected to under-perform the CareCloud. But the preferred stock apears to be less risky and, when comparing its historical volatility, Fortress Biotech Pref is 3.11 times less risky than CareCloud. The preferred stock trades about -0.26 of its potential returns per unit of risk. The CareCloud is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,220 in CareCloud on August 31, 2024 and sell it today you would earn a total of 414.00 from holding CareCloud or generate 33.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortress Biotech Pref vs. CareCloud
Performance |
| Timeline |
| Fortress Biotech Pref |
| CareCloud |
Fortress Biotech and CareCloud Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Biotech and CareCloud
The main advantage of trading using opposite Fortress Biotech and CareCloud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Biotech position performs unexpectedly, CareCloud 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 CareCloud will offset losses from the drop in CareCloud's long position.| Fortress Biotech vs. Absci Corp | Fortress Biotech vs. Larimar Therapeutics | Fortress Biotech vs. InMed Pharmaceuticals | Fortress Biotech vs. Kronos Bio |
| CareCloud vs. Evolent Health | CareCloud vs. Simulations Plus | CareCloud vs. Privia Health Group | CareCloud 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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