Correlation Between P3 Health and DocGo

Can any of the company-specific risk be diversified away by investing in both P3 Health and DocGo 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 P3 Health and DocGo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between P3 Health Partners and DocGo Inc, you can compare the effects of market volatilities on P3 Health and DocGo 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 P3 Health with a short position of DocGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of P3 Health and DocGo.

Diversification Opportunities for P3 Health and DocGo

-0.49

Correlation Coefficient

P3 Health  DocGo

Very good diversification

The 3 months correlation between PIIIW and DocGo is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding P3 Health Partners and DocGo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DocGo Inc and P3 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 P3 Health Partners are associated (or correlated) with DocGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DocGo Inc has no effect on the direction of P3 Health i.e., P3 Health and DocGo go up and down completely randomly.

Pair Corralation between P3 Health and DocGo

Assuming the 90 days horizon P3 Health Partners is expected to generate 29.19 times more return on investment than DocGo. However, P3 Health is 29.19 times more volatile than DocGo Inc. It trades about 0.12 of its potential returns per unit of risk. DocGo Inc is currently generating about -0.02 per unit of risk. If you would invest  16.00  in P3 Health Partners on October 21, 2024 and sell it today you would lose (14.09) from holding P3 Health Partners or give up 88.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	57.46%
Values	Daily Returns

P3 Health Partners  vs.  DocGo Inc

P3 Health Partners

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in P3 Health Partners are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, P3 Health showed solid returns over the last few months and may actually be approaching a breakup point.

DocGo Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DocGo Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, DocGo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with P3 Health and DocGo

The main advantage of trading using opposite P3 Health and DocGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if P3 Health position performs unexpectedly, DocGo 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 DocGo will offset losses from the drop in DocGo's long position.

The idea behind P3 Health Partners and DocGo 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 Stocks Directory module to find actively traded stocks across global markets.