Correlation Between RA Medical and Heart Test
Can any of the company-specific risk be diversified away by investing in both RA Medical and Heart Test 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 RA Medical and Heart Test into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RA Medical Systems and Heart Test Laboratories, you can compare the effects of market volatilities on RA Medical and Heart Test 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 RA Medical with a short position of Heart Test. Check out your portfolio center. Please also check ongoing floating volatility patterns of RA Medical and Heart Test.
Diversification Opportunities for RA Medical and Heart Test
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RMED and Heart is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding RA Medical Systems and Heart Test Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heart Test Laboratories and RA 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 RA Medical Systems are associated (or correlated) with Heart Test. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heart Test Laboratories has no effect on the direction of RA Medical i.e., RA Medical and Heart Test go up and down completely randomly.
Pair Corralation between RA Medical and Heart Test
Given the investment horizon of 90 days RA Medical Systems is expected to under-perform the Heart Test. But the stock apears to be less risky and, when comparing its historical volatility, RA Medical Systems is 1.79 times less risky than Heart Test. The stock trades about -0.12 of its potential returns per unit of risk. The Heart Test Laboratories is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 13,400 in Heart Test Laboratories on August 25, 2024 and sell it today you would lose (13,133) from holding Heart Test Laboratories or give up 98.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.99% |
| Values | Daily Returns |
RA Medical Systems vs. Heart Test Laboratories
Performance |
| Timeline |
| RA Medical Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Heart Test Laboratories |
RA Medical and Heart Test Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RA Medical and Heart Test
The main advantage of trading using opposite RA Medical and Heart Test positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RA Medical position performs unexpectedly, Heart Test 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 Heart Test will offset losses from the drop in Heart Test's long position.| RA Medical vs. SINTX Technologies | RA Medical vs. ReShape Lifesciences | RA Medical vs. Bone Biologics Corp | RA Medical vs. Tivic Health Systems |
| Heart Test vs. Tivic Health Systems | Heart Test vs. Bluejay Diagnostics | Heart Test vs. Nuwellis | Heart Test vs. NeuroMetrix |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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