Correlation Between CareCloud and So Young

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

By analyzing existing cross correlation between CareCloud and So Young International, you can compare the effects of market volatilities on CareCloud and So Young 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 So Young. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareCloud and So Young.

Diversification Opportunities for CareCloud and So Young

-0.76

Correlation Coefficient

CareCloud  So Young

Pay attention - limited upside

The 3 months correlation between CareCloud and So Young is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding CareCloud and So Young International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on So Young International 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 So Young. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of So Young International has no effect on the direction of CareCloud i.e., CareCloud and So Young go up and down completely randomly.

Pair Corralation between CareCloud and So Young

Assuming the 90 days horizon CareCloud is expected to generate 0.3 times more return on investment than So Young. However, CareCloud is 3.38 times less risky than So Young. It trades about 0.24 of its potential returns per unit of risk. So Young International is currently generating about 0.0 per unit of risk. If you would invest  1,777  in CareCloud on October 9, 2024 and sell it today you would earn a total of  83.00  from holding CareCloud or generate 4.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

CareCloud  vs.  So Young International

CareCloud

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CareCloud are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, CareCloud displayed solid returns over the last few months and may actually be approaching a breakup point.

So Young International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days So Young International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with CareCloud and So Young

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

The idea behind CareCloud and So Young International 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.