Correlation Between Heartbeam and PAVmed Series

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

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

Diversification Opportunities for Heartbeam and PAVmed Series

0.37

Correlation Coefficient

Heartbeam  PAVmed Series

Weak diversification

The 3 months correlation between Heartbeam and PAVmed is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Heartbeam and PAVmed Series Z in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAVmed Series Z and Heartbeam 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 Heartbeam are associated (or correlated) with PAVmed Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAVmed Series Z has no effect on the direction of Heartbeam i.e., Heartbeam and PAVmed Series go up and down completely randomly.

Pair Corralation between Heartbeam and PAVmed Series

Given the investment horizon of 90 days Heartbeam is expected to generate 0.21 times more return on investment than PAVmed Series. However, Heartbeam is 4.87 times less risky than PAVmed Series. It trades about -0.34 of its potential returns per unit of risk. PAVmed Series Z is currently generating about -0.08 per unit of risk. If you would invest  314.00  in Heartbeam on October 6, 2024 and sell it today you would lose (90.00) from holding Heartbeam or give up 28.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	85.0%
Values	Daily Returns

Heartbeam  vs.  PAVmed Series Z

Heartbeam

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Heartbeam are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Heartbeam may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PAVmed Series Z

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PAVmed Series Z are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, PAVmed Series showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Heartbeam and PAVmed Series

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

The idea behind Heartbeam and PAVmed Series Z 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.