Correlation Between MSP Recovery and Ontrak

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

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

Diversification Opportunities for MSP Recovery and Ontrak

-0.56

Correlation Coefficient

MSP Recovery  Ontrak

Excellent diversification

The 3 months correlation between MSP and Ontrak is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding MSP Recovery and Ontrak Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontrak Inc and MSP Recovery 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 MSP Recovery are associated (or correlated) with Ontrak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontrak Inc has no effect on the direction of MSP Recovery i.e., MSP Recovery and Ontrak go up and down completely randomly.

Pair Corralation between MSP Recovery and Ontrak

If you would invest  6.97  in MSP Recovery on September 4, 2024 and sell it today you would lose (2.81) from holding MSP Recovery or give up 40.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	6.67%
Values	Daily Returns

MSP Recovery  vs.  Ontrak Inc

MSP Recovery

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MSP Recovery are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, MSP Recovery showed solid returns over the last few months and may actually be approaching a breakup point.

Ontrak Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ontrak Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Ontrak is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with MSP Recovery and Ontrak

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

The idea behind MSP Recovery and Ontrak Inc 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.