Correlation Between Veradigm and CareMax
Can any of the company-specific risk be diversified away by investing in both Veradigm 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 Veradigm and CareMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veradigm and CareMax, you can compare the effects of market volatilities on Veradigm 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 Veradigm with a short position of CareMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veradigm and CareMax.
Diversification Opportunities for Veradigm and CareMax
Excellent diversification
The 3 months correlation between Veradigm and CareMax is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Veradigm and CareMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareMax and Veradigm 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 Veradigm 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 Veradigm i.e., Veradigm and CareMax go up and down completely randomly.
Pair Corralation between Veradigm and CareMax
Given the investment horizon of 90 days Veradigm is expected to generate 0.14 times more return on investment than CareMax. However, Veradigm is 7.15 times less risky than CareMax. It trades about -0.08 of its potential returns per unit of risk. CareMax is currently generating about -0.04 per unit of risk. If you would invest 1,778 in Veradigm on September 6, 2024 and sell it today you would lose (445.00) from holding Veradigm or give up 25.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 30.36% |
Values | Daily Returns |
Veradigm vs. CareMax
Performance |
Timeline |
Veradigm |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CareMax |
Veradigm and CareMax Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Veradigm and CareMax
The main advantage of trading using opposite Veradigm and CareMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veradigm 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.Veradigm vs. National Research Corp | Veradigm vs. Definitive Healthcare Corp | Veradigm vs. HealthStream | Veradigm vs. Certara |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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