Correlation Between Pulmonx Corp and Masimo

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

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

Diversification Opportunities for Pulmonx Corp and Masimo

-0.55

Correlation Coefficient

Pulmonx Corp  Masimo

Excellent diversification

The 3 months correlation between Pulmonx and Masimo is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Pulmonx Corp and Masimo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masimo and Pulmonx Corp 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 Pulmonx Corp are associated (or correlated) with Masimo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masimo has no effect on the direction of Pulmonx Corp i.e., Pulmonx Corp and Masimo go up and down completely randomly.

Pair Corralation between Pulmonx Corp and Masimo

Given the investment horizon of 90 days Pulmonx Corp is expected to generate 9.18 times less return on investment than Masimo. In addition to that, Pulmonx Corp is 1.75 times more volatile than Masimo. It trades about 0.02 of its total potential returns per unit of risk. Masimo is currently generating about 0.28 per unit of volatility. If you would invest  11,402  in Masimo on September 2, 2024 and sell it today you would earn a total of  5,852  from holding Masimo or generate 51.32% return on investment over 90 days.

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

Pulmonx Corp  vs.  Masimo

Pulmonx Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pulmonx Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Pulmonx Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Masimo

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Masimo are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Masimo demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pulmonx Corp and Masimo

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

The idea behind Pulmonx Corp and Masimo 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 CEOs Directory module to screen CEOs from public companies around the world.