Correlation Between Globus Medical and TransMedics
Can any of the company-specific risk be diversified away by investing in both Globus Medical and TransMedics 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 Globus Medical and TransMedics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globus Medical and TransMedics Group, you can compare the effects of market volatilities on Globus Medical and TransMedics 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 Globus Medical with a short position of TransMedics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globus Medical and TransMedics.
Diversification Opportunities for Globus Medical and TransMedics
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Globus and TransMedics is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Globus Medical and TransMedics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransMedics Group and Globus Medical 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 Globus Medical are associated (or correlated) with TransMedics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransMedics Group has no effect on the direction of Globus Medical i.e., Globus Medical and TransMedics go up and down completely randomly.
Pair Corralation between Globus Medical and TransMedics
Given the investment horizon of 90 days Globus Medical is expected to generate 0.24 times more return on investment than TransMedics. However, Globus Medical is 4.2 times less risky than TransMedics. It trades about 0.19 of its potential returns per unit of risk. TransMedics Group is currently generating about -0.16 per unit of risk. If you would invest 8,332 in Globus Medical on October 20, 2024 and sell it today you would earn a total of 748.00 from holding Globus Medical or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globus Medical vs. TransMedics Group
Performance |
| Timeline |
| Globus Medical |
| TransMedics Group |
Globus Medical and TransMedics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globus Medical and TransMedics
The main advantage of trading using opposite Globus Medical and TransMedics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globus Medical position performs unexpectedly, TransMedics 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 TransMedics will offset losses from the drop in TransMedics' long position.| Globus Medical vs. Orthofix Medical | Globus Medical vs. CONMED | Globus Medical vs. Alphatec Holdings | Globus Medical vs. LivaNova PLC |
| TransMedics vs. Inspire Medical Systems | TransMedics vs. Inari Medical | TransMedics vs. InMode | TransMedics 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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