Correlation Between Adm Tronics and Acutus Medical

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

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

Diversification Opportunities for Adm Tronics and Acutus Medical

-0.5

Correlation Coefficient

Adm Tronics  Acutus Medical

Very good diversification

The 3 months correlation between Adm and Acutus is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Adm Tronics Unltd and Acutus Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acutus Medical and Adm Tronics 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 Adm Tronics Unltd are associated (or correlated) with Acutus Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acutus Medical has no effect on the direction of Adm Tronics i.e., Adm Tronics and Acutus Medical go up and down completely randomly.

Pair Corralation between Adm Tronics and Acutus Medical

Given the investment horizon of 90 days Adm Tronics Unltd is expected to generate 1.22 times more return on investment than Acutus Medical. However, Adm Tronics is 1.22 times more volatile than Acutus Medical. It trades about 0.12 of its potential returns per unit of risk. Acutus Medical is currently generating about -0.1 per unit of risk. If you would invest  7.00  in Adm Tronics Unltd on October 14, 2024 and sell it today you would earn a total of  8.00  from holding Adm Tronics Unltd or generate 114.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

Adm Tronics Unltd  vs.  Acutus Medical

Adm Tronics Unltd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adm Tronics Unltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Adm Tronics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Acutus Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acutus Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Acutus Medical is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Adm Tronics and Acutus Medical

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

The idea behind Adm Tronics Unltd and Acutus Medical 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.