Correlation Between Figs and CareCloud

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

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

Diversification Opportunities for Figs and CareCloud

-0.22

Correlation Coefficient

Figs  CareCloud

Very good diversification

The 3 months correlation between Figs and CareCloud is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and CareCloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareCloud and Figs 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 Figs Inc are associated (or correlated) with CareCloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareCloud has no effect on the direction of Figs i.e., Figs and CareCloud go up and down completely randomly.

Pair Corralation between Figs and CareCloud

Given the investment horizon of 90 days Figs is expected to generate 34.76 times less return on investment than CareCloud. But when comparing it to its historical volatility, Figs Inc is 2.05 times less risky than CareCloud. It trades about 0.0 of its potential returns per unit of risk. CareCloud is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  130.00  in CareCloud on December 4, 2024 and sell it today you would earn a total of  176.00  from holding CareCloud or generate 135.38% return on investment over 90 days.

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

Figs Inc  vs.  CareCloud

Figs Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Figs Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CareCloud

Risk-Adjusted Performance

Very Weak

Over the last 90 days CareCloud has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, CareCloud is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Figs and CareCloud

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

The idea behind Figs Inc and CareCloud 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..