Correlation Between Outset Medical and DermTech
Can any of the company-specific risk be diversified away by investing in both Outset Medical and DermTech 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 DermTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outset Medical and DermTech, you can compare the effects of market volatilities on Outset Medical and DermTech 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 DermTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outset Medical and DermTech.
Diversification Opportunities for Outset Medical and DermTech
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Outset and DermTech is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and DermTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DermTech 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 DermTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DermTech has no effect on the direction of Outset Medical i.e., Outset Medical and DermTech go up and down completely randomly.
Pair Corralation between Outset Medical and DermTech
Allowing for the 90-day total investment horizon Outset Medical is expected to generate 0.48 times more return on investment than DermTech. However, Outset Medical is 2.08 times less risky than DermTech. It trades about -0.02 of its potential returns per unit of risk. DermTech is currently generating about -0.04 per unit of risk. If you would invest 341.00 in Outset Medical on November 5, 2024 and sell it today you would lose (260.00) from holding Outset Medical or give up 76.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 57.32% |
| Values | Daily Returns |
Outset Medical vs. DermTech
Performance |
| Timeline |
| Outset Medical |
| DermTech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Outset Medical and DermTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outset Medical and DermTech
The main advantage of trading using opposite Outset Medical and DermTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outset Medical position performs unexpectedly, DermTech 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 DermTech will offset losses from the drop in DermTech's long position.| Outset Medical vs. Inari Medical | Outset Medical vs. Clearpoint Neuro | Outset Medical vs. Inspire Medical Systems | Outset Medical vs. Nevro Corp |
| DermTech vs. TransMedics Group | DermTech vs. Curiositystream | DermTech vs. Fulgent Genetics | DermTech vs. Outset Medical |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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