Correlation Between RA Medical and Tenon Medical

Can any of the company-specific risk be diversified away by investing in both RA Medical and Tenon 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 RA Medical and Tenon Medical 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 Tenon Medical, you can compare the effects of market volatilities on RA Medical and Tenon 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 RA Medical with a short position of Tenon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of RA Medical and Tenon Medical.

Diversification Opportunities for RA Medical and Tenon Medical

0.0

Correlation Coefficient

RA Medical  Tenon Medical

Pay attention - limited upside

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

Pair Corralation between RA Medical and Tenon Medical

If you would invest  191.00  in Tenon Medical on December 28, 2024 and sell it today you would earn a total of  89.00  from holding Tenon Medical or generate 46.6% return on investment over 90 days.

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

RA Medical Systems  vs.  Tenon Medical

RA Medical Systems

Risk-Adjusted Performance

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.

Tenon Medical

Risk-Adjusted Performance

OK

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

Pair Trading with RA Medical and Tenon Medical

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

The idea behind RA Medical Systems and Tenon Medical 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.