Correlation Between Masimo and American Medical
Can any of the company-specific risk be diversified away by investing in both Masimo and American 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 Masimo and American Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Masimo and American Medical Technologies, you can compare the effects of market volatilities on Masimo and American 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 Masimo with a short position of American Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masimo and American Medical.
Diversification Opportunities for Masimo and American Medical
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Masimo and American is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Masimo and American Medical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Medical Tec and Masimo 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 Masimo are associated (or correlated) with American Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Medical Tec has no effect on the direction of Masimo i.e., Masimo and American Medical go up and down completely randomly.
Pair Corralation between Masimo and American Medical
Given the investment horizon of 90 days Masimo is expected to generate 0.15 times more return on investment than American Medical. However, Masimo is 6.54 times less risky than American Medical. It trades about 0.02 of its potential returns per unit of risk. American Medical Technologies is currently generating about -0.16 per unit of risk. If you would invest 15,036 in Masimo on September 3, 2024 and sell it today you would earn a total of 2,218 from holding Masimo or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 7.88% |
| Values | Daily Returns |
Masimo vs. American Medical Technologies
Performance |
| Timeline |
| Masimo |
| American Medical Tec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Masimo and American Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Masimo and American Medical
The main advantage of trading using opposite Masimo and American Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masimo position performs unexpectedly, American 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 American Medical will offset losses from the drop in American Medical's long position.| Masimo vs. Tandem Diabetes Care | Masimo vs. Inspire Medical Systems | Masimo vs. Penumbra | Masimo vs. Insulet |
| American Medical vs. Milestone Scientific | American Medical vs. Repro Med Systems | American Medical vs. Akoya Biosciences | American Medical vs. Pro Dex |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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