Correlation Between Perimeter Medical and Ocumetics Technology
Can any of the company-specific risk be diversified away by investing in both Perimeter Medical and Ocumetics Technology 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 Perimeter Medical and Ocumetics Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perimeter Medical Imaging and Ocumetics Technology Corp, you can compare the effects of market volatilities on Perimeter Medical and Ocumetics Technology 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 Perimeter Medical with a short position of Ocumetics Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perimeter Medical and Ocumetics Technology.
Diversification Opportunities for Perimeter Medical and Ocumetics Technology
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Perimeter and Ocumetics is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Perimeter Medical Imaging and Ocumetics Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocumetics Technology Corp and Perimeter 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 Perimeter Medical Imaging are associated (or correlated) with Ocumetics Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocumetics Technology Corp has no effect on the direction of Perimeter Medical i.e., Perimeter Medical and Ocumetics Technology go up and down completely randomly.
Pair Corralation between Perimeter Medical and Ocumetics Technology
Assuming the 90 days trading horizon Perimeter Medical Imaging is expected to generate 1.84 times more return on investment than Ocumetics Technology. However, Perimeter Medical is 1.84 times more volatile than Ocumetics Technology Corp. It trades about 0.17 of its potential returns per unit of risk. Ocumetics Technology Corp is currently generating about -0.19 per unit of risk. If you would invest 45.00 in Perimeter Medical Imaging on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Perimeter Medical Imaging or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perimeter Medical Imaging vs. Ocumetics Technology Corp
Performance |
| Timeline |
| Perimeter Medical Imaging |
| Ocumetics Technology Corp |
Perimeter Medical and Ocumetics Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perimeter Medical and Ocumetics Technology
The main advantage of trading using opposite Perimeter Medical and Ocumetics Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perimeter Medical position performs unexpectedly, Ocumetics Technology 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 Ocumetics Technology will offset losses from the drop in Ocumetics Technology's long position.| Perimeter Medical vs. Premium Income | Perimeter Medical vs. E L Financial Corp | Perimeter Medical vs. Fairfax Financial Holdings | Perimeter Medical vs. Fairfax Fin Hld |
| Ocumetics Technology vs. Premium Income | Ocumetics Technology vs. E L Financial Corp | Ocumetics Technology vs. Fairfax Financial Holdings | Ocumetics Technology vs. Fairfax Fin Hld |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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