Correlation Between Utah Medical and Straumann Holding
Can any of the company-specific risk be diversified away by investing in both Utah Medical and Straumann Holding 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 Utah Medical and Straumann Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Utah Medical Products and Straumann Holding AG, you can compare the effects of market volatilities on Utah Medical and Straumann Holding 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 Utah Medical with a short position of Straumann Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Utah Medical and Straumann Holding.
Diversification Opportunities for Utah Medical and Straumann Holding
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Utah and Straumann is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Utah Medical Products and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding and Utah 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 Utah Medical Products are associated (or correlated) with Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Utah Medical i.e., Utah Medical and Straumann Holding go up and down completely randomly.
Pair Corralation between Utah Medical and Straumann Holding
Given the investment horizon of 90 days Utah Medical Products is expected to generate 0.61 times more return on investment than Straumann Holding. However, Utah Medical Products is 1.65 times less risky than Straumann Holding. It trades about 0.09 of its potential returns per unit of risk. Straumann Holding AG is currently generating about -0.28 per unit of risk. If you would invest 6,424 in Utah Medical Products on August 27, 2024 and sell it today you would earn a total of 173.00 from holding Utah Medical Products or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Utah Medical Products vs. Straumann Holding AG
Performance |
| Timeline |
| Utah Medical Products |
| Straumann Holding |
Utah Medical and Straumann Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Utah Medical and Straumann Holding
The main advantage of trading using opposite Utah Medical and Straumann Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Utah Medical position performs unexpectedly, Straumann Holding 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 Straumann Holding will offset losses from the drop in Straumann Holding's long position.| Utah Medical vs. Precision Optics, | Utah Medical vs. Repro Med Systems | Utah Medical vs. InfuSystems Holdings | Utah Medical vs. Milestone Scientific |
| Straumann Holding vs. GlucoTrack | Straumann Holding vs. Sharps Technology | Straumann Holding vs. Utah Medical Products | Straumann Holding vs. Innovative Eyewear |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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