Correlation Between So Young and CareCloud

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

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

Diversification Opportunities for So Young and CareCloud

-0.76

Correlation Coefficient

So Young  CareCloud

Pay attention - limited upside

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

Pair Corralation between So Young and CareCloud

Allowing for the 90-day total investment horizon So Young is expected to generate 3.72 times less return on investment than CareCloud. But when comparing it to its historical volatility, So Young International is 1.01 times less risky than CareCloud. It trades about 0.01 of its potential returns per unit of risk. CareCloud is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,175  in CareCloud on October 9, 2024 and sell it today you would lose (315.00) from holding CareCloud or give up 14.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

So Young International  vs.  CareCloud

So Young International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days So Young International 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 basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

CareCloud

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CareCloud are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, CareCloud displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with So Young and CareCloud

The main advantage of trading using opposite So Young and CareCloud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if So Young 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 So Young International 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.