Correlation Between Helius Medical and Nuwellis

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

Diversification Opportunities for Helius Medical and Nuwellis

-0.32

Correlation Coefficient

Helius Medical  Nuwellis

Very good diversification

The 3 months correlation between Helius and Nuwellis is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Helius Medical Technologies and Nuwellis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuwellis 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 Nuwellis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuwellis has no effect on the direction of Helius Medical i.e., Helius Medical and Nuwellis go up and down completely randomly.

Pair Corralation between Helius Medical and Nuwellis

Given the investment horizon of 90 days Helius Medical Technologies is expected to generate 2.83 times more return on investment than Nuwellis. However, Helius Medical is 2.83 times more volatile than Nuwellis. It trades about 0.08 of its potential returns per unit of risk. Nuwellis is currently generating about 0.01 per unit of risk. If you would invest  46.00  in Helius Medical Technologies on November 19, 2024 and sell it today you would earn a total of  8.70  from holding Helius Medical Technologies or generate 18.91% 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.  Nuwellis

Helius Medical Techn

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Helius Medical Technologies are ranked lower than 5 (%) 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.

Nuwellis

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuwellis are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Nuwellis is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Helius Medical and Nuwellis

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

The idea behind Helius Medical Technologies and Nuwellis 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.