Correlation Between CareRx Corp and Trisura

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

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

Diversification Opportunities for CareRx Corp and Trisura

-0.67

Correlation Coefficient

CareRx Corp  Trisura

Excellent diversification

The 3 months correlation between CareRx and Trisura is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding CareRx Corp and Trisura Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisura Group 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 Trisura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisura Group has no effect on the direction of CareRx Corp i.e., CareRx Corp and Trisura go up and down completely randomly.

Pair Corralation between CareRx Corp and Trisura

Assuming the 90 days trading horizon CareRx Corp is expected to generate 1.25 times more return on investment than Trisura. However, CareRx Corp is 1.25 times more volatile than Trisura Group. It trades about 0.22 of its potential returns per unit of risk. Trisura Group is currently generating about -0.11 per unit of risk. If you would invest  200.00  in CareRx Corp on December 30, 2024 and sell it today you would earn a total of  76.00  from holding CareRx Corp or generate 38.0% return on investment over 90 days.

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

CareRx Corp  vs.  Trisura Group

CareRx Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CareRx Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, CareRx Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Trisura Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trisura Group 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 very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with CareRx Corp and Trisura

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

The idea behind CareRx Corp and Trisura Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .