Correlation Between R1 RCM and Certara

Can any of the company-specific risk be diversified away by investing in both R1 RCM and Certara 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 R1 RCM and Certara into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between R1 RCM Inc and Certara, you can compare the effects of market volatilities on R1 RCM and Certara 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 R1 RCM with a short position of Certara. Check out your portfolio center. Please also check ongoing floating volatility patterns of R1 RCM and Certara.

Diversification Opportunities for R1 RCM and Certara

-0.47

Correlation Coefficient

R1 RCM  Certara

Very good diversification

The 3 months correlation between RCM and Certara is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding R1 RCM Inc and Certara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Certara and R1 RCM 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 R1 RCM Inc are associated (or correlated) with Certara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Certara has no effect on the direction of R1 RCM i.e., R1 RCM and Certara go up and down completely randomly.

Pair Corralation between R1 RCM and Certara

Considering the 90-day investment horizon R1 RCM Inc is expected to generate 0.05 times more return on investment than Certara. However, R1 RCM Inc is 21.63 times less risky than Certara. It trades about 0.24 of its potential returns per unit of risk. Certara is currently generating about 0.0 per unit of risk. If you would invest  1,408  in R1 RCM Inc on September 5, 2024 and sell it today you would earn a total of  23.00  from holding R1 RCM Inc or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	84.38%
Values	Daily Returns

R1 RCM Inc  vs.  Certara

R1 RCM Inc

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days R1 RCM Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, R1 RCM is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Certara

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Certara has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Certara is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with R1 RCM and Certara

The main advantage of trading using opposite R1 RCM and Certara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if R1 RCM position performs unexpectedly, Certara 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 Certara will offset losses from the drop in Certara's long position.

The idea behind R1 RCM Inc and Certara 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.