Correlation Between RA Medical and ReShape Lifesciences
Can any of the company-specific risk be diversified away by investing in both RA Medical and ReShape Lifesciences 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 ReShape Lifesciences 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 ReShape Lifesciences, you can compare the effects of market volatilities on RA Medical and ReShape Lifesciences 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 ReShape Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of RA Medical and ReShape Lifesciences.
Diversification Opportunities for RA Medical and ReShape Lifesciences
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RMED and ReShape is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding RA Medical Systems and ReShape Lifesciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReShape Lifesciences 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 ReShape Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReShape Lifesciences has no effect on the direction of RA Medical i.e., RA Medical and ReShape Lifesciences go up and down completely randomly.
Pair Corralation between RA Medical and ReShape Lifesciences
If you would invest 68.00 in RA Medical Systems on November 3, 2024 and sell it today you would earn a total of 0.00 from holding RA Medical Systems or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
RA Medical Systems vs. ReShape Lifesciences
Performance |
| Timeline |
| RA Medical Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ReShape Lifesciences |
RA Medical and ReShape Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RA Medical and ReShape Lifesciences
The main advantage of trading using opposite RA Medical and ReShape Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RA Medical position performs unexpectedly, ReShape Lifesciences 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 ReShape Lifesciences will offset losses from the drop in ReShape Lifesciences' long position.| RA Medical vs. SINTX Technologies | RA Medical vs. ReShape Lifesciences | RA Medical vs. Bone Biologics Corp | RA Medical vs. Tivic Health Systems |
| ReShape Lifesciences vs. SINTX Technologies | ReShape Lifesciences vs. Bone Biologics Corp | ReShape Lifesciences vs. Tivic Health Systems | ReShape Lifesciences vs. Nuwellis |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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