Correlation Between Ready Capital and Oscar Health

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

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

Diversification Opportunities for Ready Capital and Oscar Health

-0.54

Correlation Coefficient

Ready Capital  Oscar Health

Excellent diversification

The 3 months correlation between Ready and Oscar is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ready Capital and Oscar Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oscar Health and Ready Capital 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 Ready Capital are associated (or correlated) with Oscar Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oscar Health has no effect on the direction of Ready Capital i.e., Ready Capital and Oscar Health go up and down completely randomly.

Pair Corralation between Ready Capital and Oscar Health

Considering the 90-day investment horizon Ready Capital is expected to generate 0.07 times more return on investment than Oscar Health. However, Ready Capital is 14.51 times less risky than Oscar Health. It trades about 0.12 of its potential returns per unit of risk. Oscar Health is currently generating about 0.0 per unit of risk. If you would invest  2,334  in Ready Capital on August 31, 2024 and sell it today you would earn a total of  116.00  from holding Ready Capital or generate 4.97% return on investment over 90 days.

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

Ready Capital  vs.  Oscar Health

Ready Capital

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ready Capital are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Ready Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oscar Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oscar Health has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Oscar Health is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ready Capital and Oscar Health

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

The idea behind Ready Capital and Oscar Health 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.