Correlation Between Paragon 28 and GlucoTrack
Can any of the company-specific risk be diversified away by investing in both Paragon 28 and GlucoTrack 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 Paragon 28 and GlucoTrack into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paragon 28 and GlucoTrack, you can compare the effects of market volatilities on Paragon 28 and GlucoTrack 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 Paragon 28 with a short position of GlucoTrack. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paragon 28 and GlucoTrack.
Diversification Opportunities for Paragon 28 and GlucoTrack
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Paragon and GlucoTrack is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Paragon 28 and GlucoTrack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlucoTrack and Paragon 28 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 Paragon 28 are associated (or correlated) with GlucoTrack. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlucoTrack has no effect on the direction of Paragon 28 i.e., Paragon 28 and GlucoTrack go up and down completely randomly.
Pair Corralation between Paragon 28 and GlucoTrack
Considering the 90-day investment horizon Paragon 28 is expected to under-perform the GlucoTrack. But the stock apears to be less risky and, when comparing its historical volatility, Paragon 28 is 3.81 times less risky than GlucoTrack. The stock trades about -0.01 of its potential returns per unit of risk. The GlucoTrack is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 810.00 in GlucoTrack on September 3, 2024 and sell it today you would lose (786.00) from holding GlucoTrack or give up 97.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paragon 28 vs. GlucoTrack
Performance |
| Timeline |
| Paragon 28 |
| GlucoTrack |
Paragon 28 and GlucoTrack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paragon 28 and GlucoTrack
The main advantage of trading using opposite Paragon 28 and GlucoTrack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paragon 28 position performs unexpectedly, GlucoTrack 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 GlucoTrack will offset losses from the drop in GlucoTrack's long position.| Paragon 28 vs. Tandem Diabetes Care | Paragon 28 vs. Inspire Medical Systems | Paragon 28 vs. Penumbra | Paragon 28 vs. Insulet |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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