Correlation Between Dynatronics and SANUWAVE Health

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

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

Diversification Opportunities for Dynatronics and SANUWAVE Health

-0.73

Correlation Coefficient

Dynatronics  SANUWAVE Health

Pay attention - limited upside

The 3 months correlation between Dynatronics and SANUWAVE is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dynatronics and SANUWAVE Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANUWAVE Health and Dynatronics 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 Dynatronics are associated (or correlated) with SANUWAVE Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANUWAVE Health has no effect on the direction of Dynatronics i.e., Dynatronics and SANUWAVE Health go up and down completely randomly.

Pair Corralation between Dynatronics and SANUWAVE Health

If you would invest  1,700  in SANUWAVE Health on October 24, 2024 and sell it today you would earn a total of  1,030  from holding SANUWAVE Health or generate 60.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.67%
Values	Daily Returns

Dynatronics  vs.  SANUWAVE Health

Dynatronics

Risk-Adjusted Performance

0 of 100

Very Weak

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

SANUWAVE Health

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SANUWAVE Health are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SANUWAVE Health showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dynatronics and SANUWAVE Health

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

The idea behind Dynatronics and SANUWAVE Health 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.