Correlation Between CareMax and Premier

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

By analyzing existing cross correlation between CareMax and Premier, you can compare the effects of market volatilities on CareMax and Premier 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 Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareMax and Premier.

Diversification Opportunities for CareMax and Premier

-0.4

Correlation Coefficient

CareMax  Premier

Very good diversification

The 3 months correlation between CareMax and Premier is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CareMax and Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier 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 Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier has no effect on the direction of CareMax i.e., CareMax and Premier go up and down completely randomly.

Pair Corralation between CareMax and Premier

Given the investment horizon of 90 days CareMax is expected to under-perform the Premier. In addition to that, CareMax is 9.78 times more volatile than Premier. It trades about -0.04 of its total potential returns per unit of risk. Premier is currently generating about 0.0 per unit of volatility. If you would invest  2,454  in Premier on September 1, 2024 and sell it today you would lose (164.00) from holding Premier or give up 6.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CareMax  vs.  Premier

CareMax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CareMax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Premier

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Premier are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Premier exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CareMax and Premier

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

The idea behind CareMax and Premier 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 Commodity Directory module to find actively traded commodities issued by global exchanges.