Correlation Between Helius Medical and Biomerica

Can any of the company-specific risk be diversified away by investing in both Helius Medical and Biomerica 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 Biomerica 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 Biomerica, you can compare the effects of market volatilities on Helius Medical and Biomerica 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 Biomerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helius Medical and Biomerica.

Diversification Opportunities for Helius Medical and Biomerica

-0.17

Correlation Coefficient

Helius Medical  Biomerica

Good diversification

The 3 months correlation between Helius and Biomerica is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Helius Medical Technologies and Biomerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerica 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 Biomerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomerica has no effect on the direction of Helius Medical i.e., Helius Medical and Biomerica go up and down completely randomly.

Pair Corralation between Helius Medical and Biomerica

Given the investment horizon of 90 days Helius Medical Technologies is expected to generate 2.89 times more return on investment than Biomerica. However, Helius Medical is 2.89 times more volatile than Biomerica. It trades about 0.09 of its potential returns per unit of risk. Biomerica is currently generating about -0.1 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Helius Medical Technologies  vs.  Biomerica

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.

Biomerica

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Biomerica are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Biomerica may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Helius Medical and Biomerica

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

The idea behind Helius Medical Technologies and Biomerica 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.