Correlation Between Viemed Healthcare and Ekso Bionics
Can any of the company-specific risk be diversified away by investing in both Viemed Healthcare and Ekso Bionics 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 Viemed Healthcare and Ekso Bionics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viemed Healthcare and Ekso Bionics Holdings, you can compare the effects of market volatilities on Viemed Healthcare and Ekso Bionics 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 Viemed Healthcare with a short position of Ekso Bionics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viemed Healthcare and Ekso Bionics.
Diversification Opportunities for Viemed Healthcare and Ekso Bionics
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Viemed and Ekso is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Ekso Bionics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekso Bionics Holdings and Viemed Healthcare 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 Viemed Healthcare are associated (or correlated) with Ekso Bionics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekso Bionics Holdings has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and Ekso Bionics go up and down completely randomly.
Pair Corralation between Viemed Healthcare and Ekso Bionics
Considering the 90-day investment horizon Viemed Healthcare is expected to generate 0.53 times more return on investment than Ekso Bionics. However, Viemed Healthcare is 1.88 times less risky than Ekso Bionics. It trades about 0.13 of its potential returns per unit of risk. Ekso Bionics Holdings is currently generating about -0.17 per unit of risk. If you would invest 742.00 in Viemed Healthcare on August 28, 2024 and sell it today you would earn a total of 123.00 from holding Viemed Healthcare or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viemed Healthcare vs. Ekso Bionics Holdings
Performance |
| Timeline |
| Viemed Healthcare |
| Ekso Bionics Holdings |
Viemed Healthcare and Ekso Bionics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viemed Healthcare and Ekso Bionics
The main advantage of trading using opposite Viemed Healthcare and Ekso Bionics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viemed Healthcare position performs unexpectedly, Ekso Bionics 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 Ekso Bionics will offset losses from the drop in Ekso Bionics' long position.The idea behind Viemed Healthcare and Ekso Bionics Holdings 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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