Correlation Between RA Medical and Thermogenesis Holdings

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

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

Diversification Opportunities for RA Medical and Thermogenesis Holdings

0.78

Correlation Coefficient

RA Medical  Thermogenesis Holdings

Poor diversification

The 3 months correlation between RMED and Thermogenesis is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding RA Medical Systems and Thermogenesis Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermogenesis Holdings and RA 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 RA Medical Systems are associated (or correlated) with Thermogenesis Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermogenesis Holdings has no effect on the direction of RA Medical i.e., RA Medical and Thermogenesis Holdings go up and down completely randomly.

Pair Corralation between RA Medical and Thermogenesis Holdings

If you would invest  32.00  in Thermogenesis Holdings on October 27, 2024 and sell it today you would earn a total of  0.00  from holding Thermogenesis Holdings or generate 0.0% return on investment over 90 days.

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

RA Medical Systems  vs.  Thermogenesis Holdings

RA Medical Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RA Medical Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, RA Medical is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Thermogenesis Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thermogenesis Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Thermogenesis Holdings is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with RA Medical and Thermogenesis Holdings

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

The idea behind RA Medical Systems and Thermogenesis Holdings 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.