Correlation Between Technology One and EMvision Medical

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Can any of the company-specific risk be diversified away by investing in both Technology One and EMvision Medical 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 Technology One and EMvision Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technology One and EMvision Medical Devices, you can compare the effects of market volatilities on Technology One and EMvision Medical 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 Technology One with a short position of EMvision Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technology One and EMvision Medical.

Diversification Opportunities for Technology One and EMvision Medical

TechnologyEMvisionDiversified AwayTechnologyEMvisionDiversified Away100%
0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between Technology and EMvision is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Technology One and EMvision Medical Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMvision Medical Devices and Technology One 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 Technology One are associated (or correlated) with EMvision Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMvision Medical Devices has no effect on the direction of Technology One i.e., Technology One and EMvision Medical go up and down completely randomly.

Pair Corralation between Technology One and EMvision Medical

Assuming the 90 days trading horizon Technology One is expected to generate 0.4 times more return on investment than EMvision Medical. However, Technology One is 2.49 times less risky than EMvision Medical. It trades about 0.11 of its potential returns per unit of risk. EMvision Medical Devices is currently generating about 0.04 per unit of risk. If you would invest  1,439  in Technology One on November 29, 2024 and sell it today you would earn a total of  1,611  from holding Technology One or generate 111.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Technology One  vs.  EMvision Medical Devices

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -5051015
JavaScript chart by amCharts 3.21.15TNE EMV
       Timeline  
Technology One 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Technology One are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Technology One is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb28.52929.53030.53131.53232.5
EMvision Medical Devices 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days EMvision Medical Devices has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.81.851.91.9522.052.1

Technology One and EMvision Medical Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.24-3.17-2.11-1.050.01.042.113.184.255.32 0.050.100.150.20
JavaScript chart by amCharts 3.21.15TNE EMV
       Returns  

Pair Trading with Technology One and EMvision Medical

The main advantage of trading using opposite Technology One and EMvision Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technology One position performs unexpectedly, EMvision Medical 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 EMvision Medical will offset losses from the drop in EMvision Medical's long position.
The idea behind Technology One and EMvision Medical Devices 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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