Correlation Between Privia Health and CareMax
Can any of the company-specific risk be diversified away by investing in both Privia Health 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 Privia Health and CareMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Privia Health Group and CareMax, you can compare the effects of market volatilities on Privia Health 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 Privia Health with a short position of CareMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Privia Health and CareMax.
Diversification Opportunities for Privia Health and CareMax
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Privia and CareMax is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Privia Health Group and CareMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareMax and Privia Health 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 Privia Health Group 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 Privia Health i.e., Privia Health and CareMax go up and down completely randomly.
Pair Corralation between Privia Health and CareMax
Given the investment horizon of 90 days Privia Health Group is expected to generate 0.03 times more return on investment than CareMax. However, Privia Health Group is 32.22 times less risky than CareMax. It trades about 0.53 of its potential returns per unit of risk. CareMax is currently generating about -0.14 per unit of risk. If you would invest 1,964 in Privia Health Group on November 2, 2024 and sell it today you would earn a total of 290.00 from holding Privia Health Group or generate 14.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Privia Health Group vs. CareMax
Performance |
| Timeline |
| Privia Health Group |
| CareMax |
Privia Health and CareMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Privia Health and CareMax
The main advantage of trading using opposite Privia Health and CareMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Privia Health 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.| Privia Health vs. Certara | Privia Health vs. HealthStream | Privia Health vs. National Research Corp | Privia Health vs. HealthEquity |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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