Correlation Between ResMed and Ekso Bionics
Can any of the company-specific risk be diversified away by investing in both ResMed and Ekso Bionics 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 ResMed and Ekso Bionics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ResMed Inc and Ekso Bionics Holdings, you can compare the effects of market volatilities on ResMed and Ekso Bionics 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 ResMed with a short position of Ekso Bionics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ResMed and Ekso Bionics.
Diversification Opportunities for ResMed and Ekso Bionics
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ResMed and Ekso is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding ResMed Inc and Ekso Bionics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekso Bionics Holdings and ResMed 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 ResMed Inc are associated (or correlated) with Ekso Bionics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekso Bionics Holdings has no effect on the direction of ResMed i.e., ResMed and Ekso Bionics go up and down completely randomly.
Pair Corralation between ResMed and Ekso Bionics
Considering the 90-day investment horizon ResMed Inc is expected to generate 0.83 times more return on investment than Ekso Bionics. However, ResMed Inc is 1.2 times less risky than Ekso Bionics. It trades about 0.16 of its potential returns per unit of risk. Ekso Bionics Holdings is currently generating about -0.02 per unit of risk. If you would invest 18,932 in ResMed Inc on January 30, 2024 and sell it today you would earn a total of 2,787 from holding ResMed Inc or generate 14.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ResMed Inc vs. Ekso Bionics Holdings
Performance |
Timeline |
ResMed Inc |
Ekso Bionics Holdings |
ResMed and Ekso Bionics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ResMed and Ekso Bionics
The main advantage of trading using opposite ResMed and Ekso Bionics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ResMed position performs unexpectedly, Ekso Bionics 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 Ekso Bionics will offset losses from the drop in Ekso Bionics' long position.ResMed vs. P3 Health Partners | ResMed vs. Novo Integrated Sciences | ResMed vs. HCA Holdings | ResMed vs. Acadia Healthcare |
Ekso Bionics vs. P3 Health Partners | Ekso Bionics vs. Novo Integrated Sciences | Ekso Bionics vs. HCA Holdings | Ekso Bionics vs. Acadia Healthcare |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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