Correlation Between Science 37 and CareCloud

Can any of the company-specific risk be diversified away by investing in both Science 37 and CareCloud 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 Science 37 and CareCloud into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Science 37 Holdings and CareCloud, you can compare the effects of market volatilities on Science 37 and CareCloud 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 Science 37 with a short position of CareCloud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science 37 and CareCloud.

Diversification Opportunities for Science 37 and CareCloud

-0.56

Correlation Coefficient

Science 37  CareCloud

Excellent diversification

The 3 months correlation between Science and CareCloud is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Science 37 Holdings and CareCloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareCloud and Science 37 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 Science 37 Holdings are associated (or correlated) with CareCloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareCloud has no effect on the direction of Science 37 i.e., Science 37 and CareCloud go up and down completely randomly.

Pair Corralation between Science 37 and CareCloud

If you would invest  1,050  in CareCloud on August 31, 2024 and sell it today you would earn a total of  584.00  from holding CareCloud or generate 55.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Science 37 Holdings  vs.  CareCloud

Science 37 Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Science 37 Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Science 37 is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

CareCloud

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CareCloud are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental indicators, CareCloud reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Science 37 and CareCloud

The main advantage of trading using opposite Science 37 and CareCloud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science 37 position performs unexpectedly, CareCloud 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 CareCloud will offset losses from the drop in CareCloud's long position.

The idea behind Science 37 Holdings and CareCloud 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.