Correlation Between Sanara Medtech and Baxter International
Can any of the company-specific risk be diversified away by investing in both Sanara Medtech and Baxter International 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 Sanara Medtech and Baxter International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanara Medtech and Baxter International, you can compare the effects of market volatilities on Sanara Medtech and Baxter International 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 Sanara Medtech with a short position of Baxter International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanara Medtech and Baxter International.
Diversification Opportunities for Sanara Medtech and Baxter International
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sanara and Baxter is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sanara Medtech and Baxter International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baxter International and Sanara Medtech 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 Sanara Medtech are associated (or correlated) with Baxter International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baxter International has no effect on the direction of Sanara Medtech i.e., Sanara Medtech and Baxter International go up and down completely randomly.
Pair Corralation between Sanara Medtech and Baxter International
Given the investment horizon of 90 days Sanara Medtech is expected to generate 1.95 times more return on investment than Baxter International. However, Sanara Medtech is 1.95 times more volatile than Baxter International. It trades about 0.04 of its potential returns per unit of risk. Baxter International is currently generating about -0.11 per unit of risk. If you would invest 3,459 in Sanara Medtech on September 4, 2024 and sell it today you would earn a total of 177.00 from holding Sanara Medtech or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanara Medtech vs. Baxter International
Performance |
| Timeline |
| Sanara Medtech |
| Baxter International |
Sanara Medtech and Baxter International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanara Medtech and Baxter International
The main advantage of trading using opposite Sanara Medtech and Baxter International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanara Medtech position performs unexpectedly, Baxter International 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 Baxter International will offset losses from the drop in Baxter International's long position.| Sanara Medtech vs. Baxter International | Sanara Medtech vs. West Pharmaceutical Services | Sanara Medtech vs. ResMed Inc | Sanara Medtech vs. The Cooper Companies, |
| Baxter International vs. Embecta Corp | Baxter International vs. West Pharmaceutical Services | Baxter International vs. ResMed Inc | Baxter International vs. The Cooper Companies, |
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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