Correlation Between Globus Medical and Escalon Medical

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Can any of the company-specific risk be diversified away by investing in both Globus Medical 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 Globus Medical and Escalon Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globus Medical and Escalon Medical Corp, you can compare the effects of market volatilities on Globus Medical 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 Globus Medical with a short position of Escalon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globus Medical and Escalon Medical.

Diversification Opportunities for Globus Medical and Escalon Medical

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Globus and Escalon is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Globus Medical 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 Globus Medical 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 Globus Medical 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 Globus Medical i.e., Globus Medical and Escalon Medical go up and down completely randomly.

Pair Corralation between Globus Medical and Escalon Medical

If you would invest  6.00  in Escalon Medical Corp on December 29, 2023 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 Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy4.55%
ValuesDaily Returns

Globus Medical  vs.  Escalon Medical Corp

 Performance 
       Timeline  
Globus Medical 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Globus Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Globus Medical is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Escalon Medical Corp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Escalon Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Escalon Medical is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Globus Medical and Escalon Medical Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Globus Medical and Escalon Medical

The main advantage of trading using opposite Globus Medical and Escalon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globus Medical 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.
The idea behind Globus Medical and Escalon Medical Corp 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.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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