Correlation Between AVITA Medical and OPEN HOUSE

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

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

Diversification Opportunities for AVITA Medical and OPEN HOUSE

0.0

Correlation Coefficient

AVITA Medical  OPEN HOUSE

Pay attention - limited upside

The 3 months correlation between AVITA and OPEN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AVITA Medical and OPEN HOUSE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPEN HOUSE GROUP and AVITA 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 AVITA Medical are associated (or correlated) with OPEN HOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPEN HOUSE GROUP has no effect on the direction of AVITA Medical i.e., AVITA Medical and OPEN HOUSE go up and down completely randomly.

Pair Corralation between AVITA Medical and OPEN HOUSE

Assuming the 90 days trading horizon AVITA Medical is expected to generate 1.54 times more return on investment than OPEN HOUSE. However, AVITA Medical is 1.54 times more volatile than OPEN HOUSE GROUP. It trades about 0.04 of its potential returns per unit of risk. OPEN HOUSE GROUP is currently generating about 0.04 per unit of risk. If you would invest  155.00  in AVITA Medical on October 11, 2024 and sell it today you would earn a total of  99.00  from holding AVITA Medical or generate 63.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AVITA Medical  vs.  OPEN HOUSE GROUP

AVITA Medical

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AVITA Medical are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking signals, AVITA Medical reported solid returns over the last few months and may actually be approaching a breakup point.

OPEN HOUSE GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OPEN HOUSE GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with AVITA Medical and OPEN HOUSE

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

The idea behind AVITA Medical and OPEN HOUSE GROUP 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.