Correlation Between Certara and CareMax

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

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

Diversification Opportunities for Certara and CareMax

-0.49

Correlation Coefficient

Certara  CareMax

Very good diversification

The 3 months correlation between Certara and CareMax is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Certara and CareMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareMax and Certara 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 Certara are associated (or correlated) with CareMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareMax has no effect on the direction of Certara i.e., Certara and CareMax go up and down completely randomly.

Pair Corralation between Certara and CareMax

Given the investment horizon of 90 days Certara is expected to under-perform the CareMax. But the stock apears to be less risky and, when comparing its historical volatility, Certara is 10.74 times less risky than CareMax. The stock trades about -0.01 of its potential returns per unit of risk. The CareMax is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1.30  in CareMax on December 29, 2024 and sell it today you would lose (1.29) from holding CareMax or give up 99.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Certara  vs.  CareMax

Certara

Risk-Adjusted Performance

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.

CareMax

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Certara and CareMax

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

The idea behind Certara and CareMax 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.