Correlation Between CareRx Corp and Anaergia

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

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

Diversification Opportunities for CareRx Corp and Anaergia

0.21

Correlation Coefficient

CareRx Corp  Anaergia

Modest diversification

The 3 months correlation between CareRx and Anaergia is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding CareRx Corp and Anaergia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anaergia and CareRx Corp 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 Corp are associated (or correlated) with Anaergia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anaergia has no effect on the direction of CareRx Corp i.e., CareRx Corp and Anaergia go up and down completely randomly.

Pair Corralation between CareRx Corp and Anaergia

Assuming the 90 days trading horizon CareRx Corp is expected to generate 11.99 times less return on investment than Anaergia. But when comparing it to its historical volatility, CareRx Corp is 2.37 times less risky than Anaergia. It trades about 0.04 of its potential returns per unit of risk. Anaergia is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  52.00  in Anaergia on September 3, 2024 and sell it today you would earn a total of  40.00  from holding Anaergia or generate 76.92% return on investment over 90 days.

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

CareRx Corp  vs.  Anaergia

CareRx Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CareRx Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CareRx Corp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Anaergia

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anaergia are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Anaergia displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CareRx Corp and Anaergia

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

The idea behind CareRx Corp and Anaergia 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.