Correlation Between Outset Medical and FOXO Technologies
Can any of the company-specific risk be diversified away by investing in both Outset Medical and FOXO Technologies 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 FOXO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outset Medical and FOXO Technologies, you can compare the effects of market volatilities on Outset Medical and FOXO Technologies 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 FOXO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outset Medical and FOXO Technologies.
Diversification Opportunities for Outset Medical and FOXO Technologies
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Outset and FOXO is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and FOXO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOXO Technologies 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 FOXO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOXO Technologies has no effect on the direction of Outset Medical i.e., Outset Medical and FOXO Technologies go up and down completely randomly.
Pair Corralation between Outset Medical and FOXO Technologies
Allowing for the 90-day total investment horizon Outset Medical is expected to generate 6.86 times less return on investment than FOXO Technologies. But when comparing it to its historical volatility, Outset Medical is 8.18 times less risky than FOXO Technologies. It trades about 0.15 of its potential returns per unit of risk. FOXO Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 15.00 in FOXO Technologies on September 3, 2024 and sell it today you would earn a total of 37.00 from holding FOXO Technologies or generate 246.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outset Medical vs. FOXO Technologies
Performance |
| Timeline |
| Outset Medical |
| FOXO Technologies |
Outset Medical and FOXO Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outset Medical and FOXO Technologies
The main advantage of trading using opposite Outset Medical and FOXO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outset Medical position performs unexpectedly, FOXO Technologies 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 FOXO Technologies will offset losses from the drop in FOXO Technologies' long position.| Outset Medical vs. Tandem Diabetes Care | Outset Medical vs. Inspire Medical Systems | Outset Medical vs. Penumbra | Outset Medical vs. Insulet |
| FOXO Technologies vs. Progyny | FOXO Technologies vs. Teladoc | FOXO Technologies vs. Goodrx Holdings | FOXO Technologies vs. 10X Genomics |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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