Correlation Between Heska and TransMedics

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

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

Diversification Opportunities for Heska and TransMedics

-0.81

Correlation Coefficient

Heska  TransMedics

Pay attention - limited upside

The 3 months correlation between Heska and TransMedics is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Heska and TransMedics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransMedics Group and Heska 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 Heska are associated (or correlated) with TransMedics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransMedics Group has no effect on the direction of Heska i.e., Heska and TransMedics go up and down completely randomly.

Pair Corralation between Heska and TransMedics

If you would invest  11,999  in Heska on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Heska or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Heska  vs.  TransMedics Group

Heska

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heska has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, Heska is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

TransMedics Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TransMedics Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Heska and TransMedics

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

The idea behind Heska and TransMedics Group 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.