Correlation Between Doximity and ModivCare

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

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

Diversification Opportunities for Doximity and ModivCare

0.59

Correlation Coefficient

Doximity  ModivCare

Very weak diversification

The 3 months correlation between Doximity and ModivCare is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Doximity and ModivCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ModivCare 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 ModivCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ModivCare has no effect on the direction of Doximity i.e., Doximity and ModivCare go up and down completely randomly.

Pair Corralation between Doximity and ModivCare

Given the investment horizon of 90 days Doximity is expected to under-perform the ModivCare. But the stock apears to be less risky and, when comparing its historical volatility, Doximity is 7.4 times less risky than ModivCare. The stock trades about -0.01 of its potential returns per unit of risk. The ModivCare is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  141.00  in ModivCare on May 3, 2025 and sell it today you would earn a total of  129.00  from holding ModivCare or generate 91.49% return on investment over 90 days.

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

Doximity  vs.  ModivCare

Doximity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Doximity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Doximity is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

ModivCare

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ModivCare are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, ModivCare showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Doximity and ModivCare

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

The idea behind Doximity and ModivCare 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.

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 the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.