Correlation Between Turning Point and RadNet
Can any of the company-specific risk be diversified away by investing in both Turning Point and RadNet 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 Turning Point and RadNet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and RadNet Inc, you can compare the effects of market volatilities on Turning Point and RadNet 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 Turning Point with a short position of RadNet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and RadNet.
Diversification Opportunities for Turning Point and RadNet
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Turning and RadNet is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and RadNet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RadNet Inc and Turning Point 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 Turning Point Brands are associated (or correlated) with RadNet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RadNet Inc has no effect on the direction of Turning Point i.e., Turning Point and RadNet go up and down completely randomly.
Pair Corralation between Turning Point and RadNet
Considering the 90-day investment horizon Turning Point Brands is expected to generate 0.53 times more return on investment than RadNet. However, Turning Point Brands is 1.87 times less risky than RadNet. It trades about 0.56 of its potential returns per unit of risk. RadNet Inc is currently generating about 0.27 per unit of risk. If you would invest 4,723 in Turning Point Brands on September 1, 2024 and sell it today you would earn a total of 1,467 from holding Turning Point Brands or generate 31.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turning Point Brands vs. RadNet Inc
Performance |
| Timeline |
| Turning Point Brands |
| RadNet Inc |
Turning Point and RadNet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and RadNet
The main advantage of trading using opposite Turning Point and RadNet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point position performs unexpectedly, RadNet 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 RadNet will offset losses from the drop in RadNet's long position.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| RadNet vs. Sotera Health Co | RadNet vs. Neogen | RadNet vs. Myriad Genetics | RadNet vs. bioAffinity Technologies Warrant |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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