Correlation Between Doximity and CareMax

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

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

Diversification Opportunities for Doximity and CareMax

-0.53

Correlation Coefficient

Doximity  CareMax

Excellent diversification

The 3 months correlation between Doximity and CareMax is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Doximity and CareMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareMax and Doximity 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 Doximity are associated (or correlated) with CareMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareMax has no effect on the direction of Doximity i.e., Doximity and CareMax go up and down completely randomly.

Pair Corralation between Doximity and CareMax

Given the investment horizon of 90 days Doximity is expected to generate 1.19 times less return on investment than CareMax. But when comparing it to its historical volatility, Doximity is 4.8 times less risky than CareMax. It trades about 0.1 of its potential returns per unit of risk. CareMax is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  289.00  in CareMax on August 25, 2024 and sell it today you would lose (217.00) from holding CareMax or give up 75.09% of portfolio value over 90 days.

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

Doximity  vs.  CareMax

Doximity

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Doximity are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating fundamental indicators, Doximity unveiled solid returns over the last few months and may actually be approaching a breakup point.

CareMax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CareMax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Doximity and CareMax

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

The idea behind Doximity and CareMax 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..