Correlation Between Butterfly Network and Heartbeam
Can any of the company-specific risk be diversified away by investing in both Butterfly Network and Heartbeam 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 Butterfly Network and Heartbeam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Butterfly Network and Heartbeam, you can compare the effects of market volatilities on Butterfly Network and Heartbeam 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 Butterfly Network with a short position of Heartbeam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Butterfly Network and Heartbeam.
Diversification Opportunities for Butterfly Network and Heartbeam
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Butterfly and Heartbeam is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Butterfly Network and Heartbeam in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartbeam and Butterfly Network 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 Butterfly Network are associated (or correlated) with Heartbeam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartbeam has no effect on the direction of Butterfly Network i.e., Butterfly Network and Heartbeam go up and down completely randomly.
Pair Corralation between Butterfly Network and Heartbeam
Given the investment horizon of 90 days Butterfly Network is expected to generate 1.39 times more return on investment than Heartbeam. However, Butterfly Network is 1.39 times more volatile than Heartbeam. It trades about 0.4 of its potential returns per unit of risk. Heartbeam is currently generating about 0.07 per unit of risk. If you would invest 184.00 in Butterfly Network on August 31, 2024 and sell it today you would earn a total of 145.00 from holding Butterfly Network or generate 78.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Butterfly Network vs. Heartbeam
Performance |
| Timeline |
| Butterfly Network |
| Heartbeam |
Butterfly Network and Heartbeam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Butterfly Network and Heartbeam
The main advantage of trading using opposite Butterfly Network and Heartbeam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Butterfly Network position performs unexpectedly, Heartbeam 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 Heartbeam will offset losses from the drop in Heartbeam's long position.| Butterfly Network vs. Inari Medical | Butterfly Network vs. Masimo | Butterfly Network vs. Glaukos Corp | Butterfly Network vs. Inspire Medical Systems |
| Heartbeam vs. Teladoc | Heartbeam vs. Veeva Systems Class | Heartbeam vs. 10X Genomics | Heartbeam vs. Progyny |
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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