Correlation Between Paragon 28 and Vapotherm
Can any of the company-specific risk be diversified away by investing in both Paragon 28 and Vapotherm 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 Vapotherm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paragon 28 and Vapotherm, you can compare the effects of market volatilities on Paragon 28 and Vapotherm 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 Vapotherm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paragon 28 and Vapotherm.
Diversification Opportunities for Paragon 28 and Vapotherm
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Paragon and Vapotherm is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Paragon 28 and Vapotherm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vapotherm 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 Vapotherm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vapotherm has no effect on the direction of Paragon 28 i.e., Paragon 28 and Vapotherm go up and down completely randomly.
Pair Corralation between Paragon 28 and Vapotherm
If you would invest 484.00 in Paragon 28 on August 28, 2024 and sell it today you would earn a total of 502.00 from holding Paragon 28 or generate 103.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Paragon 28 vs. Vapotherm
Performance |
| Timeline |
| Paragon 28 |
| Vapotherm |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Paragon 28 and Vapotherm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paragon 28 and Vapotherm
The main advantage of trading using opposite Paragon 28 and Vapotherm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paragon 28 position performs unexpectedly, Vapotherm 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 Vapotherm will offset losses from the drop in Vapotherm's long position.| Paragon 28 vs. Pulmonx Corp | Paragon 28 vs. Iradimed Co | Paragon 28 vs. Orthofix Medical | Paragon 28 vs. Neuropace |
| Vapotherm vs. Sight Sciences | Vapotherm vs. STRATA Skin Sciences | Vapotherm vs. Neuropace | Vapotherm vs. Nexalin Technology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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