Correlation Between R1 RCM and CareMax
Can any of the company-specific risk be diversified away by investing in both R1 RCM 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 R1 RCM and CareMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between R1 RCM Inc and CareMax, you can compare the effects of market volatilities on R1 RCM 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 R1 RCM with a short position of CareMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of R1 RCM and CareMax.
Diversification Opportunities for R1 RCM and CareMax
Excellent diversification
The 3 months correlation between RCM and CareMax is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding R1 RCM Inc and CareMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareMax and R1 RCM 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 R1 RCM Inc 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 R1 RCM i.e., R1 RCM and CareMax go up and down completely randomly.
Pair Corralation between R1 RCM and CareMax
Considering the 90-day investment horizon R1 RCM Inc is expected to generate 0.0 times more return on investment than CareMax. However, R1 RCM Inc is 273.53 times less risky than CareMax. It trades about 0.54 of its potential returns per unit of risk. CareMax is currently generating about -0.19 per unit of risk. If you would invest 1,424 in R1 RCM Inc on August 25, 2024 and sell it today you would earn a total of 7.00 from holding R1 RCM Inc or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 82.61% |
| Values | Daily Returns |
R1 RCM Inc vs. CareMax
Performance |
| Timeline |
| R1 RCM Inc |
| CareMax |
R1 RCM and CareMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with R1 RCM and CareMax
The main advantage of trading using opposite R1 RCM and CareMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if R1 RCM 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.| R1 RCM vs. National Research Corp | R1 RCM vs. Definitive Healthcare Corp | R1 RCM vs. HealthStream | R1 RCM vs. Evolent Health |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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