Correlation Between Outset Medical and Bio Rad
Can any of the company-specific risk be diversified away by investing in both Outset Medical and Bio Rad 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 Outset Medical and Bio Rad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outset Medical and Bio Rad Laboratories, you can compare the effects of market volatilities on Outset Medical and Bio Rad 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 Outset Medical with a short position of Bio Rad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outset Medical and Bio Rad.
Diversification Opportunities for Outset Medical and Bio Rad
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Outset and Bio is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and Bio Rad Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Rad Laboratories and Outset 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 Outset Medical are associated (or correlated) with Bio Rad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Rad Laboratories has no effect on the direction of Outset Medical i.e., Outset Medical and Bio Rad go up and down completely randomly.
Pair Corralation between Outset Medical and Bio Rad
Allowing for the 90-day total investment horizon Outset Medical is expected to generate 85.22 times less return on investment than Bio Rad. But when comparing it to its historical volatility, Outset Medical is 42.07 times less risky than Bio Rad. It trades about 0.15 of its potential returns per unit of risk. Bio Rad Laboratories is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Bio Rad Laboratories on September 2, 2024 and sell it today you would earn a total of 33,600 from holding Bio Rad Laboratories or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 17.19% |
| Values | Daily Returns |
Outset Medical vs. Bio Rad Laboratories
Performance |
| Timeline |
| Outset Medical |
| Bio Rad Laboratories |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Outset Medical and Bio Rad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outset Medical and Bio Rad
The main advantage of trading using opposite Outset Medical and Bio Rad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outset Medical position performs unexpectedly, Bio Rad 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 Bio Rad will offset losses from the drop in Bio Rad's long position.| Outset Medical vs. Inari Medical | Outset Medical vs. Clearpoint Neuro | Outset Medical vs. Inspire Medical Systems | Outset Medical vs. Nevro Corp |
| Bio Rad vs. Profound Medical Corp | Bio Rad vs. Si Bone | Bio Rad vs. Nevro Corp | Bio Rad vs. Orthopediatrics Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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