Correlation Between Coloplast and Ekso Bionics

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

By analyzing existing cross correlation between Coloplast A and Ekso Bionics Holdings, you can compare the effects of market volatilities on Coloplast 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 Coloplast with a short position of Ekso Bionics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloplast and Ekso Bionics.

Diversification Opportunities for Coloplast and Ekso Bionics

0.45

Correlation Coefficient

Coloplast  Ekso Bionics

Very weak diversification

The 3 months correlation between Coloplast and Ekso is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Coloplast A 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 Coloplast 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 Coloplast A 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 Coloplast i.e., Coloplast and Ekso Bionics go up and down completely randomly.

Pair Corralation between Coloplast and Ekso Bionics

Assuming the 90 days horizon Coloplast A is expected to generate 0.22 times more return on investment than Ekso Bionics. However, Coloplast A is 4.48 times less risky than Ekso Bionics. It trades about -0.04 of its potential returns per unit of risk. Ekso Bionics Holdings is currently generating about -0.06 per unit of risk. If you would invest  1,093  in Coloplast A on December 29, 2024 and sell it today you would lose (41.00) from holding Coloplast A or give up 3.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Coloplast A  vs.  Ekso Bionics Holdings

Coloplast A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coloplast A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Coloplast is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ekso Bionics Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ekso Bionics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Coloplast and Ekso Bionics

The main advantage of trading using opposite Coloplast and Ekso Bionics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloplast 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.

The idea behind Coloplast A and Ekso Bionics Holdings 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.