Correlation Between Avanos Medical and WUXI BIOLOGICS
Can any of the company-specific risk be diversified away by investing in both Avanos Medical and WUXI BIOLOGICS 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 Avanos Medical and WUXI BIOLOGICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanos Medical and WUXI BIOLOGICS UNSPADR2, you can compare the effects of market volatilities on Avanos Medical and WUXI BIOLOGICS 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 Avanos Medical with a short position of WUXI BIOLOGICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanos Medical and WUXI BIOLOGICS.
Diversification Opportunities for Avanos Medical and WUXI BIOLOGICS
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avanos and WUXI is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Avanos Medical and WUXI BIOLOGICS UNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS UNSPADR2 and Avanos Medical 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 Avanos Medical are associated (or correlated) with WUXI BIOLOGICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS UNSPADR2 has no effect on the direction of Avanos Medical i.e., Avanos Medical and WUXI BIOLOGICS go up and down completely randomly.
Pair Corralation between Avanos Medical and WUXI BIOLOGICS
Assuming the 90 days trading horizon Avanos Medical is expected to generate 0.55 times more return on investment than WUXI BIOLOGICS. However, Avanos Medical is 1.82 times less risky than WUXI BIOLOGICS. It trades about -0.02 of its potential returns per unit of risk. WUXI BIOLOGICS UNSPADR2 is currently generating about -0.02 per unit of risk. If you would invest 2,480 in Avanos Medical on September 13, 2024 and sell it today you would lose (720.00) from holding Avanos Medical or give up 29.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avanos Medical vs. WUXI BIOLOGICS UNSPADR2
Performance |
| Timeline |
| Avanos Medical |
| WUXI BIOLOGICS UNSPADR2 |
Avanos Medical and WUXI BIOLOGICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanos Medical and WUXI BIOLOGICS
The main advantage of trading using opposite Avanos Medical and WUXI BIOLOGICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanos Medical position performs unexpectedly, WUXI BIOLOGICS 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 WUXI BIOLOGICS will offset losses from the drop in WUXI BIOLOGICS's long position.| Avanos Medical vs. HF FOODS GRP | Avanos Medical vs. Performance Food Group | Avanos Medical vs. Summit Hotel Properties | Avanos Medical vs. INDOFOOD AGRI RES |
| WUXI BIOLOGICS vs. Avanos Medical | WUXI BIOLOGICS vs. Microbot Medical | WUXI BIOLOGICS vs. APPLIED MATERIALS | WUXI BIOLOGICS vs. MeVis Medical Solutions |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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