Correlation Between Sofwave Medical and Human Xtensions
Can any of the company-specific risk be diversified away by investing in both Sofwave Medical and Human Xtensions 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 Human Xtensions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sofwave Medical and Human Xtensions, you can compare the effects of market volatilities on Sofwave Medical and Human Xtensions 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 Human Xtensions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofwave Medical and Human Xtensions.
Diversification Opportunities for Sofwave Medical and Human Xtensions
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sofwave and Human is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sofwave Medical and Human Xtensions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Human Xtensions 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 Human Xtensions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Human Xtensions has no effect on the direction of Sofwave Medical i.e., Sofwave Medical and Human Xtensions go up and down completely randomly.
Pair Corralation between Sofwave Medical and Human Xtensions
Assuming the 90 days trading horizon Sofwave Medical is expected to generate 0.42 times more return on investment than Human Xtensions. However, Sofwave Medical is 2.38 times less risky than Human Xtensions. It trades about 0.07 of its potential returns per unit of risk. Human Xtensions is currently generating about 0.0 per unit of risk. If you would invest 83,220 in Sofwave Medical on August 25, 2024 and sell it today you would earn a total of 96,480 from holding Sofwave Medical or generate 115.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sofwave Medical vs. Human Xtensions
Performance |
| Timeline |
| Sofwave Medical |
| Human Xtensions |
Sofwave Medical and Human Xtensions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofwave Medical and Human Xtensions
The main advantage of trading using opposite Sofwave Medical and Human Xtensions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofwave Medical position performs unexpectedly, Human Xtensions 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 Human Xtensions will offset losses from the drop in Human Xtensions' long position.| Sofwave Medical vs. Intercure | Sofwave Medical vs. Epitomee Medical | Sofwave Medical vs. Bio View | Sofwave Medical vs. Elbit Imaging |
| Human Xtensions vs. Intercure | Human Xtensions vs. Sofwave Medical | Human Xtensions vs. Epitomee Medical | Human Xtensions vs. Bio View |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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