Correlation Between Outset Medical and Catheter Precision
Can any of the company-specific risk be diversified away by investing in both Outset Medical and Catheter Precision 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 Catheter Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outset Medical and Catheter Precision, you can compare the effects of market volatilities on Outset Medical and Catheter Precision 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 Catheter Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outset Medical and Catheter Precision.
Diversification Opportunities for Outset Medical and Catheter Precision
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Outset and Catheter is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and Catheter Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catheter Precision 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 Catheter Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catheter Precision has no effect on the direction of Outset Medical i.e., Outset Medical and Catheter Precision go up and down completely randomly.
Pair Corralation between Outset Medical and Catheter Precision
Allowing for the 90-day total investment horizon Outset Medical is expected to generate 1.93 times more return on investment than Catheter Precision. However, Outset Medical is 1.93 times more volatile than Catheter Precision. It trades about 0.21 of its potential returns per unit of risk. Catheter Precision is currently generating about -0.28 per unit of risk. If you would invest 75.00 in Outset Medical on September 20, 2024 and sell it today you would earn a total of 26.00 from holding Outset Medical or generate 34.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outset Medical vs. Catheter Precision
Performance |
| Timeline |
| Outset Medical |
| Catheter Precision |
Outset Medical and Catheter Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outset Medical and Catheter Precision
The main advantage of trading using opposite Outset Medical and Catheter Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outset Medical position performs unexpectedly, Catheter Precision 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 Catheter Precision will offset losses from the drop in Catheter Precision's long position.The idea behind Outset Medical and Catheter Precision pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Catheter Precision vs. Ark Restaurants Corp | Catheter Precision vs. Vodka Brands Corp | Catheter Precision vs. Naked Wines plc | Catheter Precision vs. Cannae Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |