Correlation Between Masimo and NuVasive

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

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

Diversification Opportunities for Masimo and NuVasive

0.0

Correlation Coefficient

Masimo  NuVasive

Pay attention - limited upside

The 3 months correlation between Masimo and NuVasive is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Masimo and NuVasive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuVasive and Masimo 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 Masimo are associated (or correlated) with NuVasive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuVasive has no effect on the direction of Masimo i.e., Masimo and NuVasive go up and down completely randomly.

Pair Corralation between Masimo and NuVasive

If you would invest (100.00) in NuVasive on December 29, 2024 and sell it today you would earn a total of  100.00  from holding NuVasive or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Masimo  vs.  NuVasive

Masimo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Masimo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Masimo is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

NuVasive

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Masimo and NuVasive

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

The idea behind Masimo and NuVasive 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.