Correlation Between AmerisourceBergen and EDAP TMS
Can any of the company-specific risk be diversified away by investing in both AmerisourceBergen and EDAP TMS 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 AmerisourceBergen and EDAP TMS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AmerisourceBergen and EDAP TMS SA, you can compare the effects of market volatilities on AmerisourceBergen and EDAP TMS 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 AmerisourceBergen with a short position of EDAP TMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmerisourceBergen and EDAP TMS.
Diversification Opportunities for AmerisourceBergen and EDAP TMS
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AmerisourceBergen and EDAP is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding AmerisourceBergen and EDAP TMS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDAP TMS SA and AmerisourceBergen 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 AmerisourceBergen are associated (or correlated) with EDAP TMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDAP TMS SA has no effect on the direction of AmerisourceBergen i.e., AmerisourceBergen and EDAP TMS go up and down completely randomly.
Pair Corralation between AmerisourceBergen and EDAP TMS
If you would invest 19,145 in AmerisourceBergen on August 28, 2024 and sell it today you would earn a total of 0.00 from holding AmerisourceBergen or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
AmerisourceBergen vs. EDAP TMS SA
Performance |
| Timeline |
| AmerisourceBergen |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| EDAP TMS SA |
AmerisourceBergen and EDAP TMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AmerisourceBergen and EDAP TMS
The main advantage of trading using opposite AmerisourceBergen and EDAP TMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmerisourceBergen position performs unexpectedly, EDAP TMS 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 EDAP TMS will offset losses from the drop in EDAP TMS's long position.| AmerisourceBergen vs. Cardinal Health | AmerisourceBergen vs. Henry Schein | AmerisourceBergen vs. Owens Minor | AmerisourceBergen vs. Patterson Companies |
| EDAP TMS vs. Patterson Companies | EDAP TMS vs. Henry Schein | EDAP TMS vs. McKesson | EDAP TMS vs. Cardinal Health |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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