Correlation Between CareCloud and Vitalhub Corp

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

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

Diversification Opportunities for CareCloud and Vitalhub Corp

0.36

Correlation Coefficient

CareCloud  Vitalhub Corp

Weak diversification

The 3 months correlation between CareCloud and Vitalhub is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding CareCloud and Vitalhub Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitalhub Corp and CareCloud 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 CareCloud are associated (or correlated) with Vitalhub Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitalhub Corp has no effect on the direction of CareCloud i.e., CareCloud and Vitalhub Corp go up and down completely randomly.

Pair Corralation between CareCloud and Vitalhub Corp

Given the investment horizon of 90 days CareCloud is expected to under-perform the Vitalhub Corp. In addition to that, CareCloud is 1.6 times more volatile than Vitalhub Corp. It trades about -0.19 of its total potential returns per unit of risk. Vitalhub Corp is currently generating about -0.27 per unit of volatility. If you would invest  780.00  in Vitalhub Corp on December 4, 2024 and sell it today you would lose (118.00) from holding Vitalhub Corp or give up 15.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

CareCloud  vs.  Vitalhub Corp

CareCloud

Risk-Adjusted Performance

Very Weak

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

Vitalhub Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vitalhub Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CareCloud and Vitalhub Corp

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

The idea behind CareCloud and Vitalhub Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.