Correlation Between EDAP TMS and Ontrak
Can any of the company-specific risk be diversified away by investing in both EDAP TMS and Ontrak 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 Ontrak 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 Ontrak Inc, you can compare the effects of market volatilities on EDAP TMS and Ontrak 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 Ontrak. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDAP TMS and Ontrak.
Diversification Opportunities for EDAP TMS and Ontrak
Poor diversification
The 3 months correlation between EDAP and Ontrak is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding EDAP TMS SA and Ontrak Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontrak Inc 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 Ontrak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontrak Inc has no effect on the direction of EDAP TMS i.e., EDAP TMS and Ontrak go up and down completely randomly.
Pair Corralation between EDAP TMS and Ontrak
Given the investment horizon of 90 days EDAP TMS SA is expected to under-perform the Ontrak. In addition to that, EDAP TMS is 1.08 times more volatile than Ontrak Inc. It trades about -0.32 of its total potential returns per unit of risk. Ontrak Inc is currently generating about 0.08 per unit of volatility. If you would invest 178.00 in Ontrak Inc on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Ontrak Inc or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EDAP TMS SA vs. Ontrak Inc
Performance |
| Timeline |
| EDAP TMS SA |
| Ontrak Inc |
EDAP TMS and Ontrak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EDAP TMS and Ontrak
The main advantage of trading using opposite EDAP TMS and Ontrak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EDAP TMS position performs unexpectedly, Ontrak 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 Ontrak will offset losses from the drop in Ontrak's long position.| EDAP TMS vs. Patterson Companies | EDAP TMS vs. Henry Schein | EDAP TMS vs. McKesson | EDAP TMS vs. Cardinal Health |
| Ontrak vs. American Well Corp | Ontrak vs. Root Inc | Ontrak vs. Goodrx Holdings | Ontrak vs. Bigcommerce Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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