Correlation Between Edgewise Therapeutics and Tenon Medical
Can any of the company-specific risk be diversified away by investing in both Edgewise Therapeutics and Tenon 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 Edgewise Therapeutics and Tenon Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edgewise Therapeutics and Tenon Medical, you can compare the effects of market volatilities on Edgewise Therapeutics and Tenon 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 Edgewise Therapeutics with a short position of Tenon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewise Therapeutics and Tenon Medical.
Diversification Opportunities for Edgewise Therapeutics and Tenon Medical
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edgewise and Tenon is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Edgewise Therapeutics and Tenon Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenon Medical and Edgewise Therapeutics 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 Edgewise Therapeutics are associated (or correlated) with Tenon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenon Medical has no effect on the direction of Edgewise Therapeutics i.e., Edgewise Therapeutics and Tenon Medical go up and down completely randomly.
Pair Corralation between Edgewise Therapeutics and Tenon Medical
Given the investment horizon of 90 days Edgewise Therapeutics is expected to generate 0.36 times more return on investment than Tenon Medical. However, Edgewise Therapeutics is 2.78 times less risky than Tenon Medical. It trades about -0.06 of its potential returns per unit of risk. Tenon Medical is currently generating about -0.2 per unit of risk. If you would invest 3,332 in Edgewise Therapeutics on August 31, 2024 and sell it today you would lose (112.00) from holding Edgewise Therapeutics or give up 3.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewise Therapeutics vs. Tenon Medical
Performance |
| Timeline |
| Edgewise Therapeutics |
| Tenon Medical |
Edgewise Therapeutics and Tenon Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewise Therapeutics and Tenon Medical
The main advantage of trading using opposite Edgewise Therapeutics and Tenon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewise Therapeutics position performs unexpectedly, Tenon 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 Tenon Medical will offset losses from the drop in Tenon Medical's long position.| Edgewise Therapeutics vs. Cue Biopharma | Edgewise Therapeutics vs. Tff Pharmaceuticals | Edgewise Therapeutics vs. Eliem Therapeutics | Edgewise Therapeutics vs. Inhibrx |
| Tenon Medical vs. Ainos Inc | Tenon Medical vs. STRATA Skin Sciences | Tenon Medical vs. Neuropace | Tenon Medical vs. Movano Inc |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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