Correlation Between Onward Medical and BEL Small
Can any of the company-specific risk be diversified away by investing in both Onward Medical and BEL Small 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 Onward Medical and BEL Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Onward Medical NV and BEL Small, you can compare the effects of market volatilities on Onward Medical and BEL Small 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 Onward Medical with a short position of BEL Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onward Medical and BEL Small.
Diversification Opportunities for Onward Medical and BEL Small
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Onward and BEL is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Onward Medical NV and BEL Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEL Small and Onward 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 Onward Medical NV are associated (or correlated) with BEL Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEL Small has no effect on the direction of Onward Medical i.e., Onward Medical and BEL Small go up and down completely randomly.
Pair Corralation between Onward Medical and BEL Small
Assuming the 90 days trading horizon Onward Medical NV is expected to under-perform the BEL Small. In addition to that, Onward Medical is 3.13 times more volatile than BEL Small. It trades about -0.25 of its total potential returns per unit of risk. BEL Small is currently generating about -0.53 per unit of volatility. If you would invest 857,783 in BEL Small on September 1, 2024 and sell it today you would lose (56,545) from holding BEL Small or give up 6.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Onward Medical NV vs. BEL Small
Performance |
| Timeline |
Onward Medical and BEL Small Volatility Contrast
Predicted Return Density |
| Returns |
Onward Medical NV
Pair trading matchups for Onward Medical
BEL Small
Pair trading matchups for BEL Small
Pair Trading with Onward Medical and BEL Small
The main advantage of trading using opposite Onward Medical and BEL Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onward Medical position performs unexpectedly, BEL Small 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 BEL Small will offset losses from the drop in BEL Small's long position.| Onward Medical vs. Hyloris Developmentsen Sa | Onward Medical vs. Biocartis Group NV | Onward Medical vs. Unifiedpost Group SA |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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