Correlation Between Abbott Laboratories and Myomo
Can any of the company-specific risk be diversified away by investing in both Abbott Laboratories and Myomo 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 Abbott Laboratories and Myomo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbott Laboratories and Myomo Inc, you can compare the effects of market volatilities on Abbott Laboratories and Myomo 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 Abbott Laboratories with a short position of Myomo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbott Laboratories and Myomo.
Diversification Opportunities for Abbott Laboratories and Myomo
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Abbott and Myomo is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Abbott Laboratories and Myomo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myomo Inc and Abbott Laboratories 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 Abbott Laboratories are associated (or correlated) with Myomo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myomo Inc has no effect on the direction of Abbott Laboratories i.e., Abbott Laboratories and Myomo go up and down completely randomly.
Pair Corralation between Abbott Laboratories and Myomo
Considering the 90-day investment horizon Abbott Laboratories is expected to under-perform the Myomo. But the stock apears to be less risky and, when comparing its historical volatility, Abbott Laboratories is 5.31 times less risky than Myomo. The stock trades about -0.12 of its potential returns per unit of risk. The Myomo Inc is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 499.00 in Myomo Inc on September 13, 2024 and sell it today you would earn a total of 139.00 from holding Myomo Inc or generate 27.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbott Laboratories vs. Myomo Inc
Performance |
| Timeline |
| Abbott Laboratories |
| Myomo Inc |
Abbott Laboratories and Myomo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbott Laboratories and Myomo
The main advantage of trading using opposite Abbott Laboratories and Myomo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbott Laboratories position performs unexpectedly, Myomo 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 Myomo will offset losses from the drop in Myomo's long position.| Abbott Laboratories vs. AbbVie Inc | Abbott Laboratories vs. Eli Lilly and | Abbott Laboratories vs. Bristol Myers Squibb | Abbott Laboratories vs. Johnson Johnson |
| Myomo vs. SINTX Technologies | Myomo vs. ReShape Lifesciences | Myomo vs. Bone Biologics Corp | Myomo vs. Tivic Health Systems |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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