Correlation Between EDAP TMS and Owlet

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

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

Diversification Opportunities for EDAP TMS and Owlet

0.55

Correlation Coefficient

EDAP TMS  Owlet

Very weak diversification

The 3 months correlation between EDAP and Owlet is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding EDAP TMS SA and Owlet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owlet Inc and EDAP TMS 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 EDAP TMS SA are associated (or correlated) with Owlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owlet Inc has no effect on the direction of EDAP TMS i.e., EDAP TMS and Owlet go up and down completely randomly.

Pair Corralation between EDAP TMS and Owlet

Given the investment horizon of 90 days EDAP TMS SA is expected to generate 2.6 times more return on investment than Owlet. However, EDAP TMS is 2.6 times more volatile than Owlet Inc. It trades about 0.0 of its potential returns per unit of risk. Owlet Inc is currently generating about -0.25 per unit of risk. If you would invest  222.00  in EDAP TMS SA on October 22, 2024 and sell it today you would lose (5.00) from holding EDAP TMS SA or give up 2.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

EDAP TMS SA  vs.  Owlet Inc

EDAP TMS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EDAP TMS SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Owlet Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Owlet Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with EDAP TMS and Owlet

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

The idea behind EDAP TMS SA and Owlet Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.