Correlation Between Varex Imaging and Fonar
Can any of the company-specific risk be diversified away by investing in both Varex Imaging and Fonar 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 Varex Imaging and Fonar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Varex Imaging Corp and Fonar, you can compare the effects of market volatilities on Varex Imaging and Fonar 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 Varex Imaging with a short position of Fonar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varex Imaging and Fonar.
Diversification Opportunities for Varex Imaging and Fonar
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Varex and Fonar is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Varex Imaging Corp and Fonar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonar and Varex Imaging 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 Varex Imaging Corp are associated (or correlated) with Fonar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonar has no effect on the direction of Varex Imaging i.e., Varex Imaging and Fonar go up and down completely randomly.
Pair Corralation between Varex Imaging and Fonar
Given the investment horizon of 90 days Varex Imaging Corp is expected to generate 2.21 times more return on investment than Fonar. However, Varex Imaging is 2.21 times more volatile than Fonar. It trades about 0.0 of its potential returns per unit of risk. Fonar is currently generating about -0.13 per unit of risk. If you would invest 1,364 in Varex Imaging Corp on November 28, 2024 and sell it today you would lose (36.00) from holding Varex Imaging Corp or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Varex Imaging Corp vs. Fonar
Performance |
| Timeline |
| Varex Imaging Corp |
| Fonar |
Varex Imaging and Fonar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Varex Imaging and Fonar
The main advantage of trading using opposite Varex Imaging and Fonar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varex Imaging position performs unexpectedly, Fonar 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 Fonar will offset losses from the drop in Fonar's long position.| Varex Imaging vs. Sight Sciences | Varex Imaging vs. Apyx Medical | Varex Imaging vs. Si Bone | Varex Imaging vs. Iradimed Co |
| Fonar vs. Burning Rock Biotech | Fonar vs. Sera Prognostics | Fonar vs. Exagen Inc | Fonar vs. Castle Biosciences |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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