Correlation Between SANUWAVE Health and Ainos
Can any of the company-specific risk be diversified away by investing in both SANUWAVE Health and Ainos 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 SANUWAVE Health and Ainos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANUWAVE Health and Ainos Inc, you can compare the effects of market volatilities on SANUWAVE Health and Ainos 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 SANUWAVE Health with a short position of Ainos. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANUWAVE Health and Ainos.
Diversification Opportunities for SANUWAVE Health and Ainos
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SANUWAVE and Ainos is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding SANUWAVE Health and Ainos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainos Inc and SANUWAVE Health 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 SANUWAVE Health are associated (or correlated) with Ainos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainos Inc has no effect on the direction of SANUWAVE Health i.e., SANUWAVE Health and Ainos go up and down completely randomly.
Pair Corralation between SANUWAVE Health and Ainos
Given the investment horizon of 90 days SANUWAVE Health is expected to generate 1.15 times more return on investment than Ainos. However, SANUWAVE Health is 1.15 times more volatile than Ainos Inc. It trades about 0.17 of its potential returns per unit of risk. Ainos Inc is currently generating about -0.12 per unit of risk. If you would invest 1,840 in SANUWAVE Health on August 27, 2024 and sell it today you would earn a total of 360.00 from holding SANUWAVE Health or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANUWAVE Health vs. Ainos Inc
Performance |
| Timeline |
| SANUWAVE Health |
| Ainos Inc |
SANUWAVE Health and Ainos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANUWAVE Health and Ainos
The main advantage of trading using opposite SANUWAVE Health and Ainos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANUWAVE Health position performs unexpectedly, Ainos 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 Ainos will offset losses from the drop in Ainos' long position.The idea behind SANUWAVE Health and Ainos Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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