Correlation Between Tactile Systems and SANUWAVE Health
Can any of the company-specific risk be diversified away by investing in both Tactile Systems and SANUWAVE Health 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 Tactile Systems and SANUWAVE Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tactile Systems Technology and SANUWAVE Health, you can compare the effects of market volatilities on Tactile Systems and SANUWAVE Health 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 Tactile Systems with a short position of SANUWAVE Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tactile Systems and SANUWAVE Health.
Diversification Opportunities for Tactile Systems and SANUWAVE Health
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tactile and SANUWAVE is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Tactile Systems Technology and SANUWAVE Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANUWAVE Health and Tactile Systems 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 Tactile Systems Technology are associated (or correlated) with SANUWAVE Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANUWAVE Health has no effect on the direction of Tactile Systems i.e., Tactile Systems and SANUWAVE Health go up and down completely randomly.
Pair Corralation between Tactile Systems and SANUWAVE Health
Given the investment horizon of 90 days Tactile Systems Technology is expected to generate 0.81 times more return on investment than SANUWAVE Health. However, Tactile Systems Technology is 1.23 times less risky than SANUWAVE Health. It trades about 0.26 of its potential returns per unit of risk. SANUWAVE Health is currently generating about 0.21 per unit of risk. If you would invest 1,475 in Tactile Systems Technology on August 31, 2024 and sell it today you would earn a total of 418.00 from holding Tactile Systems Technology or generate 28.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tactile Systems Technology vs. SANUWAVE Health
Performance |
| Timeline |
| Tactile Systems Tech |
| SANUWAVE Health |
Tactile Systems and SANUWAVE Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tactile Systems and SANUWAVE Health
The main advantage of trading using opposite Tactile Systems and SANUWAVE Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tactile Systems position performs unexpectedly, SANUWAVE Health 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 SANUWAVE Health will offset losses from the drop in SANUWAVE Health's long position.| Tactile Systems vs. CONMED | Tactile Systems vs. Treace Medical Concepts | Tactile Systems vs. SurModics | Tactile Systems vs. LivaNova PLC |
| SANUWAVE Health vs. Brainsway | SANUWAVE Health vs. Venus Concept | SANUWAVE Health vs. Tactile Systems Technology | SANUWAVE Health vs. Icecure Medical |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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