Correlation Between 23Andme Holding and EDAP TMS

Can any of the company-specific risk be diversified away by investing in both 23Andme Holding and EDAP TMS 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 23Andme Holding and EDAP TMS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 23Andme Holding Co and EDAP TMS SA, you can compare the effects of market volatilities on 23Andme Holding and EDAP TMS 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 23Andme Holding with a short position of EDAP TMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of 23Andme Holding and EDAP TMS.

Diversification Opportunities for 23Andme Holding and EDAP TMS

-0.66

Correlation Coefficient

23Andme Holding  EDAP TMS

Excellent diversification

The 3 months correlation between 23Andme and EDAP is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding 23Andme Holding Co and EDAP TMS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDAP TMS SA and 23Andme Holding 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 23Andme Holding Co are associated (or correlated) with EDAP TMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDAP TMS SA has no effect on the direction of 23Andme Holding i.e., 23Andme Holding and EDAP TMS go up and down completely randomly.

Pair Corralation between 23Andme Holding and EDAP TMS

Allowing for the 90-day total investment horizon 23Andme Holding Co is expected to generate 2.36 times more return on investment than EDAP TMS. However, 23Andme Holding is 2.36 times more volatile than EDAP TMS SA. It trades about 0.02 of its potential returns per unit of risk. EDAP TMS SA is currently generating about 0.02 per unit of risk. If you would invest  57.00  in 23Andme Holding Co on February 23, 2024 and sell it today you would lose (5.00) from holding 23Andme Holding Co or give up 8.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

23Andme Holding Co  vs.  EDAP TMS SA

23Andme Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 23Andme Holding Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, 23Andme Holding may actually be approaching a critical reversion point that can send shares even higher in June 2024.

EDAP TMS SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EDAP TMS SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, EDAP TMS is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with 23Andme Holding and EDAP TMS

The main advantage of trading using opposite 23Andme Holding and EDAP TMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 23Andme Holding position performs unexpectedly, EDAP TMS 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 EDAP TMS will offset losses from the drop in EDAP TMS's long position.

The idea behind 23Andme Holding Co and EDAP TMS SA 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.