Correlation Between CareMax and Veradigm
Can any of the company-specific risk be diversified away by investing in both CareMax and Veradigm 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 CareMax and Veradigm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CareMax and Veradigm, you can compare the effects of market volatilities on CareMax and Veradigm 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 CareMax with a short position of Veradigm. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareMax and Veradigm.
Diversification Opportunities for CareMax and Veradigm
Pay attention - limited upside
The 3 months correlation between CareMax and Veradigm is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding CareMax and Veradigm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veradigm and CareMax 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 CareMax are associated (or correlated) with Veradigm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veradigm has no effect on the direction of CareMax i.e., CareMax and Veradigm go up and down completely randomly.
Pair Corralation between CareMax and Veradigm
Given the investment horizon of 90 days CareMax is expected to under-perform the Veradigm. In addition to that, CareMax is 7.1 times more volatile than Veradigm. It trades about -0.04 of its total potential returns per unit of risk. Veradigm is currently generating about -0.09 per unit of volatility. If you would invest 1,805 in Veradigm on September 11, 2024 and sell it today you would lose (472.00) from holding Veradigm or give up 26.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 29.76% |
Values | Daily Returns |
CareMax vs. Veradigm
Performance |
Timeline |
CareMax |
Veradigm |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CareMax and Veradigm Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CareMax and Veradigm
The main advantage of trading using opposite CareMax and Veradigm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareMax position performs unexpectedly, Veradigm 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 Veradigm will offset losses from the drop in Veradigm's long position.CareMax vs. Evolent Health | CareMax vs. Certara | CareMax vs. Privia Health Group | CareMax vs. HealthStream |
Veradigm vs. National Research Corp | Veradigm vs. Definitive Healthcare Corp | Veradigm vs. HealthStream | Veradigm vs. Certara |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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