Correlation Between EDAP TMS and Heartbeam
Can any of the company-specific risk be diversified away by investing in both EDAP TMS 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 EDAP TMS and Heartbeam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EDAP TMS SA and Heartbeam, you can compare the effects of market volatilities on EDAP TMS 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 EDAP TMS with a short position of Heartbeam. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDAP TMS and Heartbeam.
Diversification Opportunities for EDAP TMS and Heartbeam
Very good diversification
The 3 months correlation between EDAP and Heartbeam is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding EDAP TMS SA and Heartbeam in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartbeam and EDAP TMS 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 EDAP TMS SA 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 EDAP TMS i.e., EDAP TMS and Heartbeam go up and down completely randomly.
Pair Corralation between EDAP TMS and Heartbeam
Given the investment horizon of 90 days EDAP TMS SA is expected to under-perform the Heartbeam. But the stock apears to be less risky and, when comparing its historical volatility, EDAP TMS SA is 2.0 times less risky than Heartbeam. The stock trades about -0.32 of its potential returns per unit of risk. The Heartbeam is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 241.00 in Heartbeam on August 30, 2024 and sell it today you would earn a total of 44.00 from holding Heartbeam or generate 18.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EDAP TMS SA vs. Heartbeam
Performance |
| Timeline |
| EDAP TMS SA |
| Heartbeam |
EDAP TMS and Heartbeam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EDAP TMS and Heartbeam
The main advantage of trading using opposite EDAP TMS and Heartbeam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EDAP TMS 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.| EDAP TMS vs. Patterson Companies | EDAP TMS vs. Henry Schein | EDAP TMS vs. McKesson | EDAP TMS vs. Cardinal Health |
| Heartbeam vs. FOXO Technologies | Heartbeam vs. EUDA Health Holdings | Heartbeam vs. Nutex Health | Heartbeam 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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