Correlation Between Carespan Health and Pace Metals

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

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

Diversification Opportunities for Carespan Health and Pace Metals

1.0

Correlation Coefficient

Carespan Health  Pace Metals

No risk reduction

The 3 months correlation between Carespan and Pace is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Carespan Health and Pace Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Metals and Carespan 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 Carespan Health are associated (or correlated) with Pace Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Metals has no effect on the direction of Carespan Health i.e., Carespan Health and Pace Metals go up and down completely randomly.

Pair Corralation between Carespan Health and Pace Metals

If you would invest  16.00  in Pace Metals on April 24, 2025 and sell it today you would earn a total of  0.00  from holding Pace Metals or generate 0.0% return on investment over 90 days.

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

Carespan Health  vs.  Pace Metals

Carespan Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carespan Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Carespan Health is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pace Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pace Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Pace Metals is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Carespan Health and Pace Metals

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

The idea behind Carespan Health and Pace Metals 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.