Correlation Between CareMax and Sharecare

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

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

Diversification Opportunities for CareMax and Sharecare

-0.02

Correlation Coefficient

CareMax  Sharecare

Good diversification

The 3 months correlation between CareMax and Sharecare is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding CareMax and Sharecare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharecare 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 Sharecare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharecare has no effect on the direction of CareMax i.e., CareMax and Sharecare go up and down completely randomly.

Pair Corralation between CareMax and Sharecare

Given the investment horizon of 90 days CareMax is expected to under-perform the Sharecare. In addition to that, CareMax is 4.22 times more volatile than Sharecare. It trades about -0.16 of its total potential returns per unit of risk. Sharecare is currently generating about -0.03 per unit of volatility. If you would invest  8.99  in Sharecare on September 3, 2024 and sell it today you would lose (0.39) from holding Sharecare or give up 4.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.81%
Values	Daily Returns

CareMax  vs.  Sharecare

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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sharecare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharecare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sharecare is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with CareMax and Sharecare

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

The idea behind CareMax and Sharecare 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.