Correlation Between Medical Equipment and Horizon Active

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

By analyzing existing cross correlation between Medical Equipment And and Horizon Active Income, you can compare the effects of market volatilities on Medical Equipment and Horizon Active 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 Medical Equipment with a short position of Horizon Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Equipment and Horizon Active.

Diversification Opportunities for Medical Equipment and Horizon Active

0.89

Correlation Coefficient

Medical Equipment  Horizon Active

Very poor diversification

The 3 months correlation between Medical and Horizon is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Medical Equipment And and Horizon Active Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Active Income and Medical Equipment 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 Medical Equipment And are associated (or correlated) with Horizon Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Active Income has no effect on the direction of Medical Equipment i.e., Medical Equipment and Horizon Active go up and down completely randomly.

Pair Corralation between Medical Equipment and Horizon Active

Assuming the 90 days horizon Medical Equipment And is expected to generate 4.11 times more return on investment than Horizon Active. However, Medical Equipment is 4.11 times more volatile than Horizon Active Income. It trades about 0.18 of its potential returns per unit of risk. Horizon Active Income is currently generating about 0.3 per unit of risk. If you would invest  6,628  in Medical Equipment And on June 24, 2024 and sell it today you would earn a total of  160.00  from holding Medical Equipment And or generate 2.41% return on investment over 90 days.

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

Medical Equipment And  vs.  Horizon Active Income

Medical Equipment And

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Medical Equipment And are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Medical Equipment may actually be approaching a critical reversion point that can send shares even higher in October 2024.

Horizon Active Income

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Active Income are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Horizon Active is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Medical Equipment and Horizon Active

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

The idea behind Medical Equipment And and Horizon Active Income 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .