Correlation Between Outset Medical and Varex Imaging
Can any of the company-specific risk be diversified away by investing in both Outset Medical and Varex Imaging 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 Varex Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outset Medical and Varex Imaging Corp, you can compare the effects of market volatilities on Outset Medical and Varex Imaging 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 Varex Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outset Medical and Varex Imaging.
Diversification Opportunities for Outset Medical and Varex Imaging
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Outset and Varex is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and Varex Imaging Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Varex Imaging Corp 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 Varex Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Varex Imaging Corp has no effect on the direction of Outset Medical i.e., Outset Medical and Varex Imaging go up and down completely randomly.
Pair Corralation between Outset Medical and Varex Imaging
Allowing for the 90-day total investment horizon Outset Medical is expected to under-perform the Varex Imaging. In addition to that, Outset Medical is 3.34 times more volatile than Varex Imaging Corp. It trades about -0.05 of its total potential returns per unit of risk. Varex Imaging Corp is currently generating about -0.03 per unit of volatility. If you would invest 2,188 in Varex Imaging Corp on September 19, 2024 and sell it today you would lose (672.00) from holding Varex Imaging Corp or give up 30.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outset Medical vs. Varex Imaging Corp
Performance |
| Timeline |
| Outset Medical |
| Varex Imaging Corp |
Outset Medical and Varex Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outset Medical and Varex Imaging
The main advantage of trading using opposite Outset Medical and Varex Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outset Medical position performs unexpectedly, Varex Imaging 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 Varex Imaging will offset losses from the drop in Varex Imaging's long position.| Outset Medical vs. Inari Medical | Outset Medical vs. Clearpoint Neuro | Outset Medical vs. Inspire Medical Systems | Outset Medical vs. Nevro 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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