Correlation Between Outset Medical and Retractable Technologies
Can any of the company-specific risk be diversified away by investing in both Outset Medical and Retractable 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 Retractable 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 Retractable Technologies, you can compare the effects of market volatilities on Outset Medical and Retractable 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 Retractable Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outset Medical and Retractable Technologies.
Diversification Opportunities for Outset Medical and Retractable Technologies
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Outset and Retractable is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and Retractable Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retractable 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 Retractable Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retractable Technologies has no effect on the direction of Outset Medical i.e., Outset Medical and Retractable Technologies go up and down completely randomly.
Pair Corralation between Outset Medical and Retractable Technologies
Allowing for the 90-day total investment horizon Outset Medical is expected to under-perform the Retractable Technologies. In addition to that, Outset Medical is 2.98 times more volatile than Retractable Technologies. It trades about -0.04 of its total potential returns per unit of risk. Retractable Technologies is currently generating about -0.07 per unit of volatility. If you would invest 110.00 in Retractable Technologies on September 2, 2024 and sell it today you would lose (48.00) from holding Retractable Technologies or give up 43.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outset Medical vs. Retractable Technologies
Performance |
| Timeline |
| Outset Medical |
| Retractable Technologies |
Outset Medical and Retractable Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outset Medical and Retractable Technologies
The main advantage of trading using opposite Outset Medical and Retractable Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outset Medical position performs unexpectedly, Retractable 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 Retractable Technologies will offset losses from the drop in Retractable Technologies' long position.| Outset Medical vs. Inari Medical | Outset Medical vs. Clearpoint Neuro | Outset Medical vs. Inspire Medical Systems | Outset Medical vs. Nevro Corp |
| Retractable Technologies vs. Milestone Scientific | Retractable Technologies vs. CarPartsCom | Retractable Technologies vs. OncoCyte Corp | Retractable Technologies vs. Alpha Pro Tech |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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