Correlation Between CVRx and Masimo
Can any of the company-specific risk be diversified away by investing in both CVRx and Masimo 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 CVRx and Masimo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVRx Inc and Masimo, you can compare the effects of market volatilities on CVRx and Masimo 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 CVRx with a short position of Masimo. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVRx and Masimo.
Diversification Opportunities for CVRx and Masimo
Poor diversification
The 3 months correlation between CVRx and Masimo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CVRx Inc and Masimo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masimo and CVRx 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 CVRx Inc are associated (or correlated) with Masimo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masimo has no effect on the direction of CVRx i.e., CVRx and Masimo go up and down completely randomly.
Pair Corralation between CVRx and Masimo
Given the investment horizon of 90 days CVRx Inc is expected to generate 3.06 times more return on investment than Masimo. However, CVRx is 3.06 times more volatile than Masimo. It trades about 0.28 of its potential returns per unit of risk. Masimo is currently generating about 0.44 per unit of risk. If you would invest 1,029 in CVRx Inc on August 28, 2024 and sell it today you would earn a total of 524.00 from holding CVRx Inc or generate 50.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVRx Inc vs. Masimo
Performance |
| Timeline |
| CVRx Inc |
| Masimo |
CVRx and Masimo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVRx and Masimo
The main advantage of trading using opposite CVRx and Masimo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVRx position performs unexpectedly, Masimo 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 Masimo will offset losses from the drop in Masimo's long position.The idea behind CVRx Inc and Masimo pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Masimo vs. Heartbeam | Masimo vs. EUDA Health Holdings | Masimo vs. Nutex Health | Masimo vs. Healthcare Triangle |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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