Correlation Between CareRx and BC Bud

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

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

Diversification Opportunities for CareRx and BC Bud

-0.52

Correlation Coefficient

CareRx  BC Bud

Excellent diversification

The 3 months correlation between CareRx and BCBCF is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding CareRx and The BC Bud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC Bud and CareRx 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 CareRx are associated (or correlated) with BC Bud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC Bud has no effect on the direction of CareRx i.e., CareRx and BC Bud go up and down completely randomly.

Pair Corralation between CareRx and BC Bud

Assuming the 90 days horizon CareRx is expected to generate 0.26 times more return on investment than BC Bud. However, CareRx is 3.82 times less risky than BC Bud. It trades about 0.22 of its potential returns per unit of risk. The BC Bud is currently generating about -0.09 per unit of risk. If you would invest  128.00  in CareRx on December 21, 2024 and sell it today you would earn a total of  55.00  from holding CareRx or generate 42.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

CareRx  vs.  The BC Bud

CareRx

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CareRx are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, CareRx reported solid returns over the last few months and may actually be approaching a breakup point.

BC Bud

Risk-Adjusted Performance

Very Weak

Over the last 90 days The BC Bud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators 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 CareRx and BC Bud

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

The idea behind CareRx and The BC Bud 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.