Correlation Between FOXO Technologies and Avita Medical
Can any of the company-specific risk be diversified away by investing in both FOXO Technologies and Avita 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 FOXO Technologies and Avita Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOXO Technologies and Avita Medical, you can compare the effects of market volatilities on FOXO Technologies and Avita 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 FOXO Technologies with a short position of Avita Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOXO Technologies and Avita Medical.
Diversification Opportunities for FOXO Technologies and Avita Medical
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FOXO and Avita is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding FOXO Technologies and Avita Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avita Medical and FOXO Technologies 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 FOXO Technologies are associated (or correlated) with Avita Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avita Medical has no effect on the direction of FOXO Technologies i.e., FOXO Technologies and Avita Medical go up and down completely randomly.
Pair Corralation between FOXO Technologies and Avita Medical
Given the investment horizon of 90 days FOXO Technologies is expected to under-perform the Avita Medical. In addition to that, FOXO Technologies is 3.61 times more volatile than Avita Medical. It trades about -0.11 of its total potential returns per unit of risk. Avita Medical is currently generating about -0.03 per unit of volatility. If you would invest 1,258 in Avita Medical on September 15, 2024 and sell it today you would lose (37.00) from holding Avita Medical or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FOXO Technologies vs. Avita Medical
Performance |
| Timeline |
| FOXO Technologies |
| Avita Medical |
FOXO Technologies and Avita Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOXO Technologies and Avita Medical
The main advantage of trading using opposite FOXO Technologies and Avita Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOXO Technologies position performs unexpectedly, Avita 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 Avita Medical will offset losses from the drop in Avita Medical's long position.| FOXO Technologies vs. Avita Medical | FOXO Technologies vs. Sight Sciences | FOXO Technologies vs. Treace Medical Concepts | FOXO Technologies vs. Neuropace |
| Avita Medical vs. Clearpoint Neuro | Avita Medical vs. Sight Sciences | Avita Medical vs. Treace Medical Concepts | Avita Medical vs. Rxsight |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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