Correlation Between Amexdrug and CareRx

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

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

Diversification Opportunities for Amexdrug and CareRx

0.0

Correlation Coefficient

Amexdrug  CareRx

Pay attention - limited upside

The 3 months correlation between Amexdrug and CareRx is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amexdrug and CareRx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareRx and Amexdrug 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 Amexdrug are associated (or correlated) with CareRx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareRx has no effect on the direction of Amexdrug i.e., Amexdrug and CareRx go up and down completely randomly.

Pair Corralation between Amexdrug and CareRx

If you would invest  0.20  in Amexdrug on October 23, 2024 and sell it today you would earn a total of  0.00  from holding Amexdrug or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Amexdrug  vs.  CareRx

Amexdrug

Risk-Adjusted Performance

0 of 100

Very Weak

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

CareRx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CareRx has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, CareRx is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Amexdrug and CareRx

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

The idea behind Amexdrug and CareRx 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.

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.