Correlation Between Caretrust and Anavex Life

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Caretrust and Anavex Life 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 Caretrust and Anavex Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caretrust and Anavex Life Sciences, you can compare the effects of market volatilities on Caretrust and Anavex Life 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 Caretrust with a short position of Anavex Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caretrust and Anavex Life.

Diversification Opportunities for Caretrust and Anavex Life

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Caretrust and Anavex is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Caretrust and Anavex Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anavex Life Sciences and Caretrust 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 Caretrust are associated (or correlated) with Anavex Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anavex Life Sciences has no effect on the direction of Caretrust i.e., Caretrust and Anavex Life go up and down completely randomly.

Pair Corralation between Caretrust and Anavex Life

Given the investment horizon of 90 days Caretrust is expected to generate 1.3 times less return on investment than Anavex Life. But when comparing it to its historical volatility, Caretrust is 4.73 times less risky than Anavex Life. It trades about 0.22 of its potential returns per unit of risk. Anavex Life Sciences is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,172  in Anavex Life Sciences on September 4, 2022 and sell it today you would earn a total of  33.00  from holding Anavex Life Sciences or generate 2.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Caretrust  vs.  Anavex Life Sciences

 Performance (%) 
       Timeline  
Caretrust 
Caretrust Performance
0 of 100
Over the last 90 days Caretrust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Caretrust is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Caretrust Price Channel

Anavex Life Sciences 
Anavex Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Anavex Life Sciences are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Anavex Life revealed solid returns over the last few months and may actually be approaching a breakup point.

Anavex Price Channel

Caretrust and Anavex Life Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Caretrust and Anavex Life

The main advantage of trading using opposite Caretrust and Anavex Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caretrust position performs unexpectedly, Anavex Life 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 Anavex Life will offset losses from the drop in Anavex Life's long position.
Caretrust vs. Medical Properties Trust
The idea behind Caretrust and Anavex Life Sciences 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.
Anavex Life vs. Anheuser Busch Inbev
Anavex Life vs. Northwest Healthcare Properties
Check out your portfolio center. 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

Other Complementary Tools

Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go