Correlation Between EDAP TMS and CareCloud
Can any of the company-specific risk be diversified away by investing in both EDAP TMS and CareCloud 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 CareCloud 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 CareCloud, you can compare the effects of market volatilities on EDAP TMS and CareCloud 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 CareCloud. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDAP TMS and CareCloud.
Diversification Opportunities for EDAP TMS and CareCloud
Excellent diversification
The 3 months correlation between EDAP and CareCloud is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding EDAP TMS SA and CareCloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareCloud 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 CareCloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareCloud has no effect on the direction of EDAP TMS i.e., EDAP TMS and CareCloud go up and down completely randomly.
Pair Corralation between EDAP TMS and CareCloud
Given the investment horizon of 90 days EDAP TMS SA is expected to under-perform the CareCloud. But the stock apears to be less risky and, when comparing its historical volatility, EDAP TMS SA is 1.66 times less risky than CareCloud. The stock trades about -0.07 of its potential returns per unit of risk. The CareCloud is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,318 in CareCloud on September 4, 2024 and sell it today you would lose (629.00) from holding CareCloud or give up 27.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EDAP TMS SA vs. CareCloud
Performance |
| Timeline |
| EDAP TMS SA |
| CareCloud |
EDAP TMS and CareCloud Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EDAP TMS and CareCloud
The main advantage of trading using opposite EDAP TMS and CareCloud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EDAP TMS position performs unexpectedly, CareCloud 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 CareCloud will offset losses from the drop in CareCloud's long position.| EDAP TMS vs. Baxter International | EDAP TMS vs. West Pharmaceutical Services | EDAP TMS vs. ResMed Inc | EDAP TMS vs. The Cooper Companies, |
| CareCloud vs. CareCloud | CareCloud vs. Fortress Biotech Pref | CareCloud vs. FAT Brands | CareCloud vs. CareCloud |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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