Correlation Between CareRay Digital and MayAir Technology

Can any of the company-specific risk be diversified away by investing in both CareRay Digital and MayAir Technology 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 CareRay Digital and MayAir Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CareRay Digital Medical and MayAir Technology Co, you can compare the effects of market volatilities on CareRay Digital and MayAir Technology 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 CareRay Digital with a short position of MayAir Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareRay Digital and MayAir Technology.

Diversification Opportunities for CareRay Digital and MayAir Technology

0.79

Correlation Coefficient

CareRay Digital  MayAir Technology

Poor diversification

The 3 months correlation between CareRay and MayAir is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CareRay Digital Medical and MayAir Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MayAir Technology and CareRay Digital 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 CareRay Digital Medical are associated (or correlated) with MayAir Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MayAir Technology has no effect on the direction of CareRay Digital i.e., CareRay Digital and MayAir Technology go up and down completely randomly.

Pair Corralation between CareRay Digital and MayAir Technology

Assuming the 90 days trading horizon CareRay Digital Medical is expected to generate 0.77 times more return on investment than MayAir Technology. However, CareRay Digital Medical is 1.3 times less risky than MayAir Technology. It trades about 0.06 of its potential returns per unit of risk. MayAir Technology Co is currently generating about 0.04 per unit of risk. If you would invest  1,326  in CareRay Digital Medical on September 15, 2024 and sell it today you would earn a total of  246.00  from holding CareRay Digital Medical or generate 18.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

CareRay Digital Medical  vs.  MayAir Technology Co

CareRay Digital Medical

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CareRay Digital Medical are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CareRay Digital sustained solid returns over the last few months and may actually be approaching a breakup point.

MayAir Technology

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MayAir Technology Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MayAir Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CareRay Digital and MayAir Technology

The main advantage of trading using opposite CareRay Digital and MayAir Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareRay Digital position performs unexpectedly, MayAir Technology 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 MayAir Technology will offset losses from the drop in MayAir Technology's long position.

The idea behind CareRay Digital Medical and MayAir Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.