Correlation Between Viemed Healthcare and ReShape Lifesciences
Can any of the company-specific risk be diversified away by investing in both Viemed Healthcare and ReShape Lifesciences 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 ReShape Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viemed Healthcare and ReShape Lifesciences, you can compare the effects of market volatilities on Viemed Healthcare and ReShape Lifesciences 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 ReShape Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viemed Healthcare and ReShape Lifesciences.
Diversification Opportunities for Viemed Healthcare and ReShape Lifesciences
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Viemed and ReShape is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and ReShape Lifesciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReShape Lifesciences 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 ReShape Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReShape Lifesciences has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and ReShape Lifesciences go up and down completely randomly.
Pair Corralation between Viemed Healthcare and ReShape Lifesciences
Considering the 90-day investment horizon Viemed Healthcare is expected to under-perform the ReShape Lifesciences. But the stock apears to be less risky and, when comparing its historical volatility, Viemed Healthcare is 2.14 times less risky than ReShape Lifesciences. The stock trades about -0.09 of its potential returns per unit of risk. The ReShape Lifesciences is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 574.00 in ReShape Lifesciences on August 28, 2024 and sell it today you would lose (6.00) from holding ReShape Lifesciences or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viemed Healthcare vs. ReShape Lifesciences
Performance |
| Timeline |
| Viemed Healthcare |
| ReShape Lifesciences |
Viemed Healthcare and ReShape Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viemed Healthcare and ReShape Lifesciences
The main advantage of trading using opposite Viemed Healthcare and ReShape Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viemed Healthcare position performs unexpectedly, ReShape Lifesciences 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 ReShape Lifesciences will offset losses from the drop in ReShape Lifesciences' long position.The idea behind Viemed Healthcare and ReShape Lifesciences 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.| ReShape Lifesciences vs. SINTX Technologies | ReShape Lifesciences vs. Bone Biologics Corp | ReShape Lifesciences vs. Tivic Health Systems | ReShape Lifesciences vs. Nuwellis |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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