Correlation Between Orthofix Medical and Nanomix

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

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

Diversification Opportunities for Orthofix Medical and Nanomix

0.86

Correlation Coefficient

Orthofix Medical  Nanomix

Very poor diversification

The 3 months correlation between Orthofix and Nanomix is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Orthofix Medical and Nanomix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanomix and Orthofix 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 Orthofix Medical are associated (or correlated) with Nanomix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanomix has no effect on the direction of Orthofix Medical i.e., Orthofix Medical and Nanomix go up and down completely randomly.

Pair Corralation between Orthofix Medical and Nanomix

Given the investment horizon of 90 days Orthofix Medical is expected to generate 9.28 times less return on investment than Nanomix. But when comparing it to its historical volatility, Orthofix Medical is 5.88 times less risky than Nanomix. It trades about 0.08 of its potential returns per unit of risk. Nanomix is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Nanomix on September 12, 2024 and sell it today you would earn a total of  0.01  from holding Nanomix or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Orthofix Medical  vs.  Nanomix

Orthofix Medical

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Orthofix Medical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward indicators, Orthofix Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nanomix

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nanomix are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, Nanomix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orthofix Medical and Nanomix

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

The idea behind Orthofix Medical and Nanomix 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.