Correlation Between Outset MedicalInc and Bruker

Can any of the company-specific risk be diversified away by investing in both Outset MedicalInc and Bruker 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 Outset MedicalInc and Bruker into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Outset MedicalInc and Bruker, you can compare the effects of market volatilities on Outset MedicalInc and Bruker 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 Outset MedicalInc with a short position of Bruker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outset MedicalInc and Bruker.

Diversification Opportunities for Outset MedicalInc and Bruker

-0.65

Correlation Coefficient

Outset MedicalInc  Bruker

Excellent diversification

The 3 months correlation between Outset and Bruker is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Outset MedicalInc and Bruker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bruker and Outset MedicalInc 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 Outset MedicalInc are associated (or correlated) with Bruker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bruker has no effect on the direction of Outset MedicalInc i.e., Outset MedicalInc and Bruker go up and down completely randomly.

Pair Corralation between Outset MedicalInc and Bruker

Allowing for the 90-day total investment horizon Outset MedicalInc is expected to generate 3.1 times more return on investment than Bruker. However, Outset MedicalInc is 3.1 times more volatile than Bruker. It trades about 0.06 of its potential returns per unit of risk. Bruker is currently generating about -0.07 per unit of risk. If you would invest  347.00  in Outset MedicalInc on February 28, 2024 and sell it today you would earn a total of  40.00  from holding Outset MedicalInc or generate 11.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Outset MedicalInc  vs.  Bruker

Outset MedicalInc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Outset MedicalInc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, Outset MedicalInc displayed solid returns over the last few months and may actually be approaching a breakup point.

Bruker

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bruker has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Outset MedicalInc and Bruker

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

The idea behind Outset MedicalInc and Bruker 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.