Correlation Between Check Cap and Avita Medical
Can any of the company-specific risk be diversified away by investing in both Check Cap and Avita Medical 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 Check Cap and Avita Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Check Cap and Avita Medical, you can compare the effects of market volatilities on Check Cap and Avita Medical 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 Check Cap with a short position of Avita Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Cap and Avita Medical.
Diversification Opportunities for Check Cap and Avita Medical
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Check and Avita is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Check Cap and Avita Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avita Medical and Check Cap 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 Check Cap are associated (or correlated) with Avita Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avita Medical has no effect on the direction of Check Cap i.e., Check Cap and Avita Medical go up and down completely randomly.
Pair Corralation between Check Cap and Avita Medical
Given the investment horizon of 90 days Check Cap is expected to under-perform the Avita Medical. In addition to that, Check Cap is 1.95 times more volatile than Avita Medical. It trades about -0.4 of its total potential returns per unit of risk. Avita Medical is currently generating about -0.07 per unit of volatility. If you would invest 914.00 in Avita Medical on November 10, 2024 and sell it today you would lose (46.00) from holding Avita Medical or give up 5.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Cap vs. Avita Medical
Performance |
| Timeline |
| Check Cap |
| Avita Medical |
Check Cap and Avita Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Cap and Avita Medical
The main advantage of trading using opposite Check Cap and Avita Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Cap position performs unexpectedly, Avita Medical 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 Avita Medical will offset losses from the drop in Avita Medical's long position.| Check Cap vs. Fonar | Check Cap vs. Burning Rock Biotech | Check Cap vs. Sera Prognostics | Check Cap vs. DarioHealth Corp |
| Avita Medical vs. Clearpoint Neuro | Avita Medical vs. Sight Sciences | Avita Medical vs. Treace Medical Concepts | Avita Medical vs. Rxsight |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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