Correlation Between ReShape Lifesciences and Viemed Healthcare
Can any of the company-specific risk be diversified away by investing in both ReShape Lifesciences 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 ReShape Lifesciences and Viemed Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ReShape Lifesciences and Viemed Healthcare, you can compare the effects of market volatilities on ReShape Lifesciences 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 ReShape Lifesciences with a short position of Viemed Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of ReShape Lifesciences and Viemed Healthcare.
Diversification Opportunities for ReShape Lifesciences and Viemed Healthcare
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ReShape and Viemed is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ReShape Lifesciences and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare 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 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 ReShape Lifesciences i.e., ReShape Lifesciences and Viemed Healthcare go up and down completely randomly.
Pair Corralation between ReShape Lifesciences and Viemed Healthcare
Given the investment horizon of 90 days ReShape Lifesciences is expected to generate 2.13 times more return on investment than Viemed Healthcare. However, ReShape Lifesciences is 2.13 times more volatile than Viemed Healthcare. It trades about -0.04 of its potential returns per unit of risk. Viemed Healthcare is currently generating about -0.1 per unit of risk. If you would invest 593.00 in ReShape Lifesciences on August 30, 2024 and sell it today you would lose (37.00) from holding ReShape Lifesciences or give up 6.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ReShape Lifesciences vs. Viemed Healthcare
Performance |
| Timeline |
| ReShape Lifesciences |
| Viemed Healthcare |
ReShape Lifesciences and Viemed Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ReShape Lifesciences and Viemed Healthcare
The main advantage of trading using opposite ReShape Lifesciences and Viemed Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReShape Lifesciences 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.| ReShape Lifesciences vs. SINTX Technologies | ReShape Lifesciences vs. Bone Biologics Corp | ReShape Lifesciences vs. Tivic Health Systems | ReShape Lifesciences vs. Nuwellis |
| Viemed Healthcare vs. ReShape Lifesciences | Viemed Healthcare vs. Bone Biologics Corp | Viemed Healthcare vs. Tivic Health Systems | Viemed Healthcare 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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