Correlation Between Ontrak and Root
Can any of the company-specific risk be diversified away by investing in both Ontrak and Root 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 Ontrak and Root into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ontrak Inc and Root Inc, you can compare the effects of market volatilities on Ontrak and Root 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 Ontrak with a short position of Root. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ontrak and Root.
Diversification Opportunities for Ontrak and Root
Very good diversification
The 3 months correlation between Ontrak and Root is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ontrak Inc and Root Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Root Inc and Ontrak 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 Ontrak Inc are associated (or correlated) with Root. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Root Inc has no effect on the direction of Ontrak i.e., Ontrak and Root go up and down completely randomly.
Pair Corralation between Ontrak and Root
Given the investment horizon of 90 days Ontrak Inc is expected to under-perform the Root. But the stock apears to be less risky and, when comparing its historical volatility, Ontrak Inc is 1.92 times less risky than Root. The stock trades about -0.12 of its potential returns per unit of risk. The Root Inc is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 9,765 in Root Inc on December 1, 2024 and sell it today you would earn a total of 3,752 from holding Root Inc or generate 38.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ontrak Inc vs. Root Inc
Performance |
| Timeline |
| Ontrak Inc |
| Root Inc |
Ontrak and Root Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ontrak and Root
The main advantage of trading using opposite Ontrak and Root positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ontrak position performs unexpectedly, Root 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 Root will offset losses from the drop in Root's long position.| Ontrak vs. American Well Corp | Ontrak vs. Root Inc | Ontrak vs. Goodrx Holdings | Ontrak vs. Bigcommerce Holdings |
| Root vs. Selective Insurance Group | Root vs. Donegal Group B | Root vs. Horace Mann Educators | Root vs. Global Indemnity PLC |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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