Correlation Between Power Integrations and Advanced Medical

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

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

Diversification Opportunities for Power Integrations and Advanced Medical

0.0

Correlation Coefficient

Power Integrations  Advanced Medical

Pay attention - limited upside

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

Pair Corralation between Power Integrations and Advanced Medical

If you would invest  238.00  in Advanced Medical Solutions on October 25, 2024 and sell it today you would earn a total of  26.00  from holding Advanced Medical Solutions or generate 10.92% return on investment over 90 days.

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

Power Integrations  vs.  Advanced Medical Solutions

Power Integrations

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Power Integrations has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Power Integrations is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Advanced Medical Sol

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Medical Solutions are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Advanced Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Power Integrations and Advanced Medical

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

The idea behind Power Integrations and Advanced Medical Solutions 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.