Correlation Between CareMax and Certara

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

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

Diversification Opportunities for CareMax and Certara

-0.49

Correlation Coefficient

CareMax  Certara

Very good diversification

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

Pair Corralation between CareMax and Certara

Given the investment horizon of 90 days CareMax is expected to generate 10.74 times more return on investment than Certara. However, CareMax is 10.74 times more volatile than Certara. It trades about 0.0 of its potential returns per unit of risk. Certara is currently generating about -0.01 per unit of risk. 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

CareMax  vs.  Certara

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.

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.

Pair Trading with CareMax and Certara

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

The idea behind CareMax and Certara 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.