Correlation Between HomeToGo and AVITA Medical
Can any of the company-specific risk be diversified away by investing in both HomeToGo 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 HomeToGo and AVITA Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeToGo SE and AVITA Medical, you can compare the effects of market volatilities on HomeToGo 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 HomeToGo with a short position of AVITA Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeToGo and AVITA Medical.
Diversification Opportunities for HomeToGo and AVITA Medical
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HomeToGo and AVITA is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and AVITA Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVITA Medical and HomeToGo 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 HomeToGo SE 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 HomeToGo i.e., HomeToGo and AVITA Medical go up and down completely randomly.
Pair Corralation between HomeToGo and AVITA Medical
Assuming the 90 days trading horizon HomeToGo SE is expected to under-perform the AVITA Medical. But the stock apears to be less risky and, when comparing its historical volatility, HomeToGo SE is 1.53 times less risky than AVITA Medical. The stock trades about -0.13 of its potential returns per unit of risk. The AVITA Medical is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 186.00 in AVITA Medical on August 29, 2024 and sell it today you would earn a total of 62.00 from holding AVITA Medical or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HomeToGo SE vs. AVITA Medical
Performance |
| Timeline |
| HomeToGo SE |
| AVITA Medical |
HomeToGo and AVITA Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeToGo and AVITA Medical
The main advantage of trading using opposite HomeToGo and AVITA Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeToGo 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.| HomeToGo vs. Ryanair Holdings plc | HomeToGo vs. SYSTEMAIR AB | HomeToGo vs. Harmony Gold Mining | HomeToGo vs. Westinghouse Air Brake |
| AVITA Medical vs. United Natural Foods | AVITA Medical vs. Lifeway Foods | AVITA Medical vs. Universal Insurance Holdings | AVITA Medical vs. Reinsurance Group of |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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