Correlation Between Cue Health and CareCloud

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

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

Diversification Opportunities for Cue Health and CareCloud

-0.76

Correlation Coefficient

Cue Health  CareCloud

Pay attention - limited upside

The 3 months correlation between Cue and CareCloud is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cue Health and CareCloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareCloud and Cue Health 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 Cue Health 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 Cue Health i.e., Cue Health and CareCloud go up and down completely randomly.

Pair Corralation between Cue Health and CareCloud

If you would invest  275.00  in CareCloud on September 14, 2024 and sell it today you would earn a total of  120.00  from holding CareCloud or generate 43.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

Cue Health  vs.  CareCloud

Cue Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cue Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Cue Health is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

CareCloud

Risk-Adjusted Performance

9 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CareCloud are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, CareCloud exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cue Health and CareCloud

The main advantage of trading using opposite Cue Health and CareCloud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cue Health 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 Cue Health 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.

Check out your portfolio center.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.