Correlation Between CPSI Old and CareMax
Can any of the company-specific risk be diversified away by investing in both CPSI Old and CareMax 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 CPSI Old and CareMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPSI Old and CareMax, you can compare the effects of market volatilities on CPSI Old and CareMax 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 CPSI Old with a short position of CareMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPSI Old and CareMax.
Diversification Opportunities for CPSI Old and CareMax
Modest diversification
The 3 months correlation between CPSI and CareMax is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CPSI Old and CareMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareMax and CPSI Old 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 CPSI Old are associated (or correlated) with CareMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareMax has no effect on the direction of CPSI Old i.e., CPSI Old and CareMax go up and down completely randomly.
Pair Corralation between CPSI Old and CareMax
Given the investment horizon of 90 days CPSI Old is expected to generate 0.13 times more return on investment than CareMax. However, CPSI Old is 7.81 times less risky than CareMax. It trades about -0.01 of its potential returns per unit of risk. CareMax is currently generating about -0.04 per unit of risk. If you would invest 2,643 in CPSI Old on September 6, 2024 and sell it today you would lose (110.00) from holding CPSI Old or give up 4.16% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 30.36% |
Values | Daily Returns |
CPSI Old vs. CareMax
Performance |
Timeline |
CPSI Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CareMax |
CPSI Old and CareMax Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CPSI Old and CareMax
The main advantage of trading using opposite CPSI Old and CareMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPSI Old position performs unexpectedly, CareMax 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 CareMax will offset losses from the drop in CareMax's long position.CPSI Old vs. National Research Corp | CPSI Old vs. Forian Inc | CPSI Old vs. HealthEquity | CPSI Old vs. Health Catalyst |
CareMax vs. Evolent Health | CareMax vs. Certara | CareMax vs. Privia Health Group | CareMax vs. HealthStream |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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