Correlation Between Zynex and Patterson Companies
Can any of the company-specific risk be diversified away by investing in both Zynex and Patterson Companies 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 Zynex and Patterson Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zynex Inc and Patterson Companies, you can compare the effects of market volatilities on Zynex and Patterson Companies 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 Zynex with a short position of Patterson Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zynex and Patterson Companies.
Diversification Opportunities for Zynex and Patterson Companies
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zynex and Patterson is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Zynex Inc and Patterson Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patterson Companies and Zynex 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 Zynex Inc are associated (or correlated) with Patterson Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patterson Companies has no effect on the direction of Zynex i.e., Zynex and Patterson Companies go up and down completely randomly.
Pair Corralation between Zynex and Patterson Companies
Given the investment horizon of 90 days Zynex Inc is expected to under-perform the Patterson Companies. But the stock apears to be less risky and, when comparing its historical volatility, Zynex Inc is 1.08 times less risky than Patterson Companies. The stock trades about -0.03 of its potential returns per unit of risk. The Patterson Companies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,887 in Patterson Companies on October 20, 2024 and sell it today you would earn a total of 203.00 from holding Patterson Companies or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zynex Inc vs. Patterson Companies
Performance |
| Timeline |
| Zynex Inc |
| Patterson Companies |
Zynex and Patterson Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zynex and Patterson Companies
The main advantage of trading using opposite Zynex and Patterson Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zynex position performs unexpectedly, Patterson Companies 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 Patterson Companies will offset losses from the drop in Patterson Companies' long position.The idea behind Zynex Inc and Patterson Companies 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.| Patterson Companies vs. Owens Minor | Patterson Companies vs. Cardinal Health | Patterson Companies vs. McKesson | Patterson Companies vs. Henry Schein |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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