Correlation Between Hologic and CareCloud

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

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

Diversification Opportunities for Hologic and CareCloud

0.54

Correlation Coefficient

Hologic  CareCloud

Very weak diversification

The 3 months correlation between Hologic and CareCloud is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hologic and CareCloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareCloud and Hologic 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 Hologic 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 Hologic i.e., Hologic and CareCloud go up and down completely randomly.

Pair Corralation between Hologic and CareCloud

Given the investment horizon of 90 days Hologic is expected to generate 0.26 times more return on investment than CareCloud. However, Hologic is 3.82 times less risky than CareCloud. It trades about -0.13 of its potential returns per unit of risk. CareCloud is currently generating about -0.16 per unit of risk. If you would invest  7,260  in Hologic on December 27, 2024 and sell it today you would lose (1,038) from holding Hologic or give up 14.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Hologic  vs.  CareCloud

Hologic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hologic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company 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 weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Hologic and CareCloud

The main advantage of trading using opposite Hologic and CareCloud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hologic 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 Hologic 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.