Correlation Between ReShape Lifesciences and Avita Medical
Can any of the company-specific risk be diversified away by investing in both ReShape Lifesciences and Avita Medical 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 ReShape Lifesciences and Avita Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ReShape Lifesciences and Avita Medical, you can compare the effects of market volatilities on ReShape Lifesciences and Avita Medical 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 ReShape Lifesciences with a short position of Avita Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ReShape Lifesciences and Avita Medical.
Diversification Opportunities for ReShape Lifesciences and Avita Medical
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ReShape and Avita is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ReShape Lifesciences and Avita Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avita Medical and ReShape Lifesciences 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 ReShape Lifesciences are associated (or correlated) with Avita Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avita Medical has no effect on the direction of ReShape Lifesciences i.e., ReShape Lifesciences and Avita Medical go up and down completely randomly.
Pair Corralation between ReShape Lifesciences and Avita Medical
Given the investment horizon of 90 days ReShape Lifesciences is expected to under-perform the Avita Medical. In addition to that, ReShape Lifesciences is 1.34 times more volatile than Avita Medical. It trades about -0.13 of its total potential returns per unit of risk. Avita Medical is currently generating about 0.03 per unit of volatility. If you would invest 1,266 in Avita Medical on September 13, 2024 and sell it today you would earn a total of 16.00 from holding Avita Medical or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ReShape Lifesciences vs. Avita Medical
Performance |
| Timeline |
| ReShape Lifesciences |
| Avita Medical |
ReShape Lifesciences and Avita Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ReShape Lifesciences and Avita Medical
The main advantage of trading using opposite ReShape Lifesciences and Avita Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReShape Lifesciences position performs unexpectedly, Avita Medical 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 Avita Medical will offset losses from the drop in Avita Medical's long position.| ReShape Lifesciences vs. Avita Medical | ReShape Lifesciences vs. Sight Sciences | ReShape Lifesciences vs. Treace Medical Concepts | ReShape Lifesciences vs. Neuropace |
| Avita Medical vs. Clearpoint Neuro | Avita Medical vs. Sight Sciences | Avita Medical vs. Treace Medical Concepts | Avita Medical vs. Rxsight |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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