Correlation Between Sofwave Medical and Bio View
Can any of the company-specific risk be diversified away by investing in both Sofwave Medical and Bio View 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 Sofwave Medical and Bio View into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sofwave Medical and Bio View, you can compare the effects of market volatilities on Sofwave Medical and Bio View 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 Sofwave Medical with a short position of Bio View. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofwave Medical and Bio View.
Diversification Opportunities for Sofwave Medical and Bio View
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sofwave and Bio is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sofwave Medical and Bio View in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio View and Sofwave 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 Sofwave Medical are associated (or correlated) with Bio View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio View has no effect on the direction of Sofwave Medical i.e., Sofwave Medical and Bio View go up and down completely randomly.
Pair Corralation between Sofwave Medical and Bio View
Assuming the 90 days trading horizon Sofwave Medical is expected to generate 0.54 times more return on investment than Bio View. However, Sofwave Medical is 1.85 times less risky than Bio View. It trades about 0.04 of its potential returns per unit of risk. Bio View is currently generating about 0.0 per unit of risk. If you would invest 168,900 in Sofwave Medical on August 25, 2024 and sell it today you would earn a total of 10,800 from holding Sofwave Medical or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sofwave Medical vs. Bio View
Performance |
| Timeline |
| Sofwave Medical |
| Bio View |
Sofwave Medical and Bio View Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofwave Medical and Bio View
The main advantage of trading using opposite Sofwave Medical and Bio View positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofwave Medical position performs unexpectedly, Bio View 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 Bio View will offset losses from the drop in Bio View's long position.| Sofwave Medical vs. Intercure | Sofwave Medical vs. Epitomee Medical | Sofwave Medical vs. Bio View | Sofwave Medical vs. Elbit Imaging |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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