Correlation Between Beyond Air and Apyx Medical
Can any of the company-specific risk be diversified away by investing in both Beyond Air and Apyx Medical 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 Beyond Air and Apyx Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Air and Apyx Medical, you can compare the effects of market volatilities on Beyond Air and Apyx Medical 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 Beyond Air with a short position of Apyx Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Air and Apyx Medical.
Diversification Opportunities for Beyond Air and Apyx Medical
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beyond and Apyx is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Air and Apyx Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apyx Medical and Beyond Air 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 Beyond Air are associated (or correlated) with Apyx Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apyx Medical has no effect on the direction of Beyond Air i.e., Beyond Air and Apyx Medical go up and down completely randomly.
Pair Corralation between Beyond Air and Apyx Medical
Given the investment horizon of 90 days Beyond Air is expected to generate 1.29 times more return on investment than Apyx Medical. However, Beyond Air is 1.29 times more volatile than Apyx Medical. It trades about 0.29 of its potential returns per unit of risk. Apyx Medical is currently generating about 0.12 per unit of risk. If you would invest 43.00 in Beyond Air on August 29, 2024 and sell it today you would earn a total of 24.00 from holding Beyond Air or generate 55.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Air vs. Apyx Medical
Performance |
| Timeline |
| Beyond Air |
| Apyx Medical |
Beyond Air and Apyx Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Air and Apyx Medical
The main advantage of trading using opposite Beyond Air and Apyx Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Air position performs unexpectedly, Apyx Medical 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 Apyx Medical will offset losses from the drop in Apyx Medical's long position.The idea behind Beyond Air and Apyx Medical 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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