Correlation Between Resmed and Hologic
Can any of the company-specific risk be diversified away by investing in both Resmed and Hologic 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 Hologic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resmed Inc DRC and Hologic, you can compare the effects of market volatilities on Resmed and Hologic 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 Hologic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resmed and Hologic.
Diversification Opportunities for Resmed and Hologic
Modest diversification
The 3 months correlation between Resmed and Hologic is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Resmed Inc DRC and Hologic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hologic 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 DRC are associated (or correlated) with Hologic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hologic has no effect on the direction of Resmed i.e., Resmed and Hologic go up and down completely randomly.
Pair Corralation between Resmed and Hologic
Assuming the 90 days trading horizon Resmed Inc DRC is expected to generate 1.3 times more return on investment than Hologic. However, Resmed is 1.3 times more volatile than Hologic. It trades about -0.2 of its potential returns per unit of risk. Hologic is currently generating about -0.47 per unit of risk. If you would invest 2,300 in Resmed Inc DRC on September 24, 2024 and sell it today you would lose (140.00) from holding Resmed Inc DRC or give up 6.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Resmed Inc DRC vs. Hologic
Performance |
| Timeline |
| Resmed Inc DRC |
| Hologic |
Resmed and Hologic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resmed and Hologic
The main advantage of trading using opposite Resmed and Hologic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resmed position performs unexpectedly, Hologic 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 Hologic will offset losses from the drop in Hologic's long position.| Resmed vs. ESSILORLUXOTTICA 12ON | Resmed vs. Intuitive Surgical | Resmed vs. EssilorLuxottica Socit anonyme | Resmed vs. ResMed Inc |
| Hologic vs. ESSILORLUXOTTICA 12ON | Hologic vs. Intuitive Surgical | Hologic vs. EssilorLuxottica Socit anonyme | Hologic vs. Resmed Inc DRC |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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