Correlation Between Viemed Healthcare and Summit Therapeutics
Can any of the company-specific risk be diversified away by investing in both Viemed Healthcare and Summit Therapeutics 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 Summit Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viemed Healthcare and Summit Therapeutics PLC, you can compare the effects of market volatilities on Viemed Healthcare and Summit Therapeutics 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 Summit Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viemed Healthcare and Summit Therapeutics.
Diversification Opportunities for Viemed Healthcare and Summit Therapeutics
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Viemed and Summit is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Summit Therapeutics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Therapeutics PLC 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 Summit Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Therapeutics PLC has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and Summit Therapeutics go up and down completely randomly.
Pair Corralation between Viemed Healthcare and Summit Therapeutics
Considering the 90-day investment horizon Viemed Healthcare is expected to generate 19.47 times less return on investment than Summit Therapeutics. But when comparing it to its historical volatility, Viemed Healthcare is 3.66 times less risky than Summit Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Summit Therapeutics PLC is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,835 in Summit Therapeutics PLC on November 3, 2024 and sell it today you would earn a total of 315.00 from holding Summit Therapeutics PLC or generate 17.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viemed Healthcare vs. Summit Therapeutics PLC
Performance |
| Timeline |
| Viemed Healthcare |
| Summit Therapeutics PLC |
Viemed Healthcare and Summit Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viemed Healthcare and Summit Therapeutics
The main advantage of trading using opposite Viemed Healthcare and Summit Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viemed Healthcare position performs unexpectedly, Summit Therapeutics 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 Summit Therapeutics will offset losses from the drop in Summit Therapeutics' long position.| Viemed Healthcare vs. Profound Medical Corp | Viemed Healthcare vs. Si Bone | Viemed Healthcare vs. IRIDEX | Viemed Healthcare vs. SurModics |
| Summit Therapeutics vs. Nkarta Inc | Summit Therapeutics vs. Cullinan Oncology LLC | Summit Therapeutics vs. Kezar Life Sciences | Summit Therapeutics vs. Kronos Bio |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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