Correlation Between Spok Holdings and CareCloud
Can any of the company-specific risk be diversified away by investing in both Spok Holdings 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 Spok Holdings and CareCloud into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spok Holdings and CareCloud, you can compare the effects of market volatilities on Spok Holdings 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 Spok Holdings with a short position of CareCloud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spok Holdings and CareCloud.
Diversification Opportunities for Spok Holdings and CareCloud
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Spok and CareCloud is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Spok Holdings and CareCloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareCloud and Spok Holdings 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 Spok Holdings 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 Spok Holdings i.e., Spok Holdings and CareCloud go up and down completely randomly.
Pair Corralation between Spok Holdings and CareCloud
Given the investment horizon of 90 days Spok Holdings is expected to under-perform the CareCloud. But the stock apears to be less risky and, when comparing its historical volatility, Spok Holdings is 1.18 times less risky than CareCloud. The stock trades about -0.12 of its potential returns per unit of risk. The CareCloud is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,800 in CareCloud on October 20, 2024 and sell it today you would earn a total of 144.00 from holding CareCloud or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Spok Holdings vs. CareCloud
Performance |
| Timeline |
| Spok Holdings |
| CareCloud |
Spok Holdings and CareCloud Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spok Holdings and CareCloud
The main advantage of trading using opposite Spok Holdings and CareCloud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spok Holdings 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.| Spok Holdings vs. Forian Inc | Spok Holdings vs. Streamline Health Solutions | Spok Holdings vs. National Research Corp | Spok Holdings vs. HealthEquity |
| CareCloud vs. CareCloud | CareCloud vs. Fortress Biotech Pref | CareCloud vs. FAT Brands | CareCloud vs. CareCloud |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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