Correlation Between Abbott Laboratories and Sharps Technology
Can any of the company-specific risk be diversified away by investing in both Abbott Laboratories and Sharps Technology 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 Sharps Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbott Laboratories and Sharps Technology, you can compare the effects of market volatilities on Abbott Laboratories and Sharps Technology 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 Sharps Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbott Laboratories and Sharps Technology.
Diversification Opportunities for Abbott Laboratories and Sharps Technology
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Abbott and Sharps is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Abbott Laboratories and Sharps Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharps Technology 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 Sharps Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharps Technology has no effect on the direction of Abbott Laboratories i.e., Abbott Laboratories and Sharps Technology go up and down completely randomly.
Pair Corralation between Abbott Laboratories and Sharps Technology
Considering the 90-day investment horizon Abbott Laboratories is expected to generate 0.17 times more return on investment than Sharps Technology. However, Abbott Laboratories is 5.91 times less risky than Sharps Technology. It trades about 0.1 of its potential returns per unit of risk. Sharps Technology is currently generating about -0.09 per unit of risk. If you would invest 10,093 in Abbott Laboratories on August 24, 2024 and sell it today you would earn a total of 1,633 from holding Abbott Laboratories or generate 16.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Abbott Laboratories vs. Sharps Technology
Performance |
| Timeline |
| Abbott Laboratories |
| Sharps Technology |
Abbott Laboratories and Sharps Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbott Laboratories and Sharps Technology
The main advantage of trading using opposite Abbott Laboratories and Sharps Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbott Laboratories position performs unexpectedly, Sharps Technology 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 Sharps Technology will offset losses from the drop in Sharps Technology's long position.| Abbott Laboratories vs. Edwards Lifesciences Corp | Abbott Laboratories vs. Outset Medical | Abbott Laboratories vs. Venus Concept | Abbott Laboratories vs. DexCom Inc |
| Sharps Technology vs. JIN MEDICAL INTERNATIONAL | Sharps Technology vs. Meihua International Medical | Sharps Technology vs. GlucoTrack | Sharps Technology vs. Innovative Eyewear |
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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