Correlation Between Outset Medical and OPTIMIZERx Corp

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

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

Diversification Opportunities for Outset Medical and OPTIMIZERx Corp

-0.38

Correlation Coefficient

Outset Medical  OPTIMIZERx Corp

Very good diversification

The 3 months correlation between Outset and OPTIMIZERx is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and OPTIMIZERx Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPTIMIZERx Corp and Outset 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 Outset Medical are associated (or correlated) with OPTIMIZERx Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPTIMIZERx Corp has no effect on the direction of Outset Medical i.e., Outset Medical and OPTIMIZERx Corp go up and down completely randomly.

Pair Corralation between Outset Medical and OPTIMIZERx Corp

Allowing for the 90-day total investment horizon Outset Medical is expected to under-perform the OPTIMIZERx Corp. But the stock apears to be less risky and, when comparing its historical volatility, Outset Medical is 1.04 times less risky than OPTIMIZERx Corp. The stock trades about -0.04 of its potential returns per unit of risk. The OPTIMIZERx Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  528.00  in OPTIMIZERx Corp on December 29, 2024 and sell it today you would earn a total of  336.00  from holding OPTIMIZERx Corp or generate 63.64% return on investment over 90 days.

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

Outset Medical  vs.  OPTIMIZERx Corp

Outset Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Outset Medical 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 primary indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

OPTIMIZERx Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OPTIMIZERx Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, OPTIMIZERx Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Outset Medical and OPTIMIZERx Corp

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

The idea behind Outset Medical and OPTIMIZERx Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.