Correlation Between G Medical and Sharps Technology
Can any of the company-specific risk be diversified away by investing in both G Medical and Sharps Technology 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 G Medical and Sharps Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G Medical Innovations and Sharps Technology, you can compare the effects of market volatilities on G Medical and Sharps Technology 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 G Medical with a short position of Sharps Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Medical and Sharps Technology.
Diversification Opportunities for G Medical and Sharps Technology
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GMVD and Sharps is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding G Medical Innovations and Sharps Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharps Technology and G 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 G Medical Innovations are associated (or correlated) with Sharps Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharps Technology has no effect on the direction of G Medical i.e., G Medical and Sharps Technology go up and down completely randomly.
Pair Corralation between G Medical and Sharps Technology
Given the investment horizon of 90 days G Medical Innovations is expected to under-perform the Sharps Technology. In addition to that, G Medical is 1.36 times more volatile than Sharps Technology. It trades about -0.06 of its total potential returns per unit of risk. Sharps Technology is currently generating about -0.01 per unit of volatility. If you would invest 2,860 in Sharps Technology on August 26, 2024 and sell it today you would lose (2,507) from holding Sharps Technology or give up 87.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.99% |
| Values | Daily Returns |
G Medical Innovations vs. Sharps Technology
Performance |
| Timeline |
| G Medical Innovations |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sharps Technology |
G Medical and Sharps Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G Medical and Sharps Technology
The main advantage of trading using opposite G Medical and Sharps Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G Medical position performs unexpectedly, Sharps Technology 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 Sharps Technology will offset losses from the drop in Sharps Technology's long position.| G Medical vs. Innovative Eyewear | G Medical vs. Sharps Technology | G Medical vs. JIN MEDICAL INTERNATIONAL | G Medical vs. Nexgel Inc |
| Sharps Technology vs. JIN MEDICAL INTERNATIONAL | Sharps Technology vs. Meihua International Medical | Sharps Technology vs. GlucoTrack | Sharps Technology vs. Innovative Eyewear |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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