Correlation Between ResMed and Viemed Healthcare
Can any of the company-specific risk be diversified away by investing in both ResMed and Viemed Healthcare 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 ResMed and Viemed Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ResMed Inc and Viemed Healthcare, you can compare the effects of market volatilities on ResMed and Viemed Healthcare 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 ResMed with a short position of Viemed Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of ResMed and Viemed Healthcare.
Diversification Opportunities for ResMed and Viemed Healthcare
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between ResMed and Viemed is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding ResMed Inc and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare and ResMed 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 ResMed Inc are associated (or correlated) with Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of ResMed i.e., ResMed and Viemed Healthcare go up and down completely randomly.
Pair Corralation between ResMed and Viemed Healthcare
Considering the 90-day investment horizon ResMed Inc is expected to generate 0.9 times more return on investment than Viemed Healthcare. However, ResMed Inc is 1.12 times less risky than Viemed Healthcare. It trades about -0.03 of its potential returns per unit of risk. Viemed Healthcare is currently generating about -0.19 per unit of risk. If you would invest 24,869 in ResMed Inc on September 12, 2024 and sell it today you would lose (347.00) from holding ResMed Inc or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ResMed Inc vs. Viemed Healthcare
Performance |
| Timeline |
| ResMed Inc |
| Viemed Healthcare |
ResMed and Viemed Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ResMed and Viemed Healthcare
The main advantage of trading using opposite ResMed and Viemed Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ResMed position performs unexpectedly, Viemed Healthcare 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 Viemed Healthcare will offset losses from the drop in Viemed Healthcare's long position.| ResMed vs. Teleflex Incorporated | ResMed vs. West Pharmaceutical Services | ResMed vs. Alcon AG | ResMed vs. ICU Medical |
| Viemed Healthcare vs. Profound Medical Corp | Viemed Healthcare vs. Si Bone | Viemed Healthcare vs. IRIDEX | Viemed Healthcare vs. SurModics |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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