Correlation Between Hyperfine and PAVmed

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

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

Diversification Opportunities for Hyperfine and PAVmed

-0.12

Correlation Coefficient

Hyperfine  PAVmed

Good diversification

The 3 months correlation between Hyperfine and PAVmed is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hyperfine and PAVmed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAVmed Inc and Hyperfine 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 Hyperfine are associated (or correlated) with PAVmed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAVmed Inc has no effect on the direction of Hyperfine i.e., Hyperfine and PAVmed go up and down completely randomly.

Pair Corralation between Hyperfine and PAVmed

Given the investment horizon of 90 days Hyperfine is expected to generate 3.92 times less return on investment than PAVmed. In addition to that, Hyperfine is 1.66 times more volatile than PAVmed Inc. It trades about 0.01 of its total potential returns per unit of risk. PAVmed Inc is currently generating about 0.07 per unit of volatility. If you would invest  64.00  in PAVmed Inc on December 30, 2024 and sell it today you would earn a total of  11.00  from holding PAVmed Inc or generate 17.19% return on investment over 90 days.

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

Hyperfine  vs.  PAVmed Inc

Hyperfine

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hyperfine has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Hyperfine may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PAVmed Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PAVmed Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, PAVmed displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hyperfine and PAVmed

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

The idea behind Hyperfine and PAVmed 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.