Correlation Between Helius Medical and Accuray Incorporated

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

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

Diversification Opportunities for Helius Medical and Accuray Incorporated

0.14

Correlation Coefficient

Helius Medical  Accuray Incorporated

Average diversification

The 3 months correlation between Helius and Accuray is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Helius Medical Technologies and Accuray Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accuray Incorporated and Helius Medical 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 Helius Medical Technologies are associated (or correlated) with Accuray Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accuray Incorporated has no effect on the direction of Helius Medical i.e., Helius Medical and Accuray Incorporated go up and down completely randomly.

Pair Corralation between Helius Medical and Accuray Incorporated

Given the investment horizon of 90 days Helius Medical Technologies is expected to generate 4.95 times more return on investment than Accuray Incorporated. However, Helius Medical is 4.95 times more volatile than Accuray Incorporated. It trades about 0.09 of its potential returns per unit of risk. Accuray Incorporated is currently generating about -0.01 per unit of risk. If you would invest  61.00  in Helius Medical Technologies on October 5, 2024 and sell it today you would earn a total of  6.00  from holding Helius Medical Technologies or generate 9.84% return on investment over 90 days.

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

Helius Medical Technologies  vs.  Accuray Incorporated

Helius Medical Techn

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Helius Medical Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, Helius Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Accuray Incorporated

Risk-Adjusted Performance

3 of 100

Weak

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

Pair Trading with Helius Medical and Accuray Incorporated

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

The idea behind Helius Medical Technologies and Accuray Incorporated 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.