Correlation Between Abbott Laboratories and Escalon Medical
Can any of the company-specific risk be diversified away by investing in both Abbott Laboratories and Escalon 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 Abbott Laboratories and Escalon Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbott Laboratories and Escalon Medical Corp, you can compare the effects of market volatilities on Abbott Laboratories and Escalon 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 Abbott Laboratories with a short position of Escalon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbott Laboratories and Escalon Medical.
Diversification Opportunities for Abbott Laboratories and Escalon Medical
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Abbott and Escalon is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Abbott Laboratories and Escalon Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Escalon Medical Corp and Abbott Laboratories 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 Abbott Laboratories are associated (or correlated) with Escalon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Escalon Medical Corp has no effect on the direction of Abbott Laboratories i.e., Abbott Laboratories and Escalon Medical go up and down completely randomly.
Pair Corralation between Abbott Laboratories and Escalon Medical
If you would invest 6.00 in Escalon Medical Corp on January 26, 2024 and sell it today you would earn a total of 0.00 from holding Escalon Medical Corp or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 1.61% |
Values | Daily Returns |
Abbott Laboratories vs. Escalon Medical Corp
Performance |
Timeline |
Abbott Laboratories |
Escalon Medical Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Abbott Laboratories and Escalon Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Abbott Laboratories and Escalon Medical
The main advantage of trading using opposite Abbott Laboratories and Escalon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbott Laboratories position performs unexpectedly, Escalon 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 Escalon Medical will offset losses from the drop in Escalon Medical's long position.Abbott Laboratories vs. Neuropace | Abbott Laboratories vs. Electromed | Abbott Laboratories vs. Orthopediatrics Corp | Abbott Laboratories vs. SurModics |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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