Correlation Between Rapid Micro and RA Medical

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

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

Diversification Opportunities for Rapid Micro and RA Medical

-0.32

Correlation Coefficient

Rapid Micro  RA Medical

Very good diversification

The 3 months correlation between Rapid and RMED is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Rapid Micro Biosystems and RA Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RA Medical Systems and Rapid Micro 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 Rapid Micro Biosystems are associated (or correlated) with RA Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RA Medical Systems has no effect on the direction of Rapid Micro i.e., Rapid Micro and RA Medical go up and down completely randomly.

Pair Corralation between Rapid Micro and RA Medical

If you would invest  91.00  in Rapid Micro Biosystems on October 26, 2024 and sell it today you would earn a total of  44.50  from holding Rapid Micro Biosystems or generate 48.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Rapid Micro Biosystems  vs.  RA Medical Systems

Rapid Micro Biosystems

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rapid Micro Biosystems are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, Rapid Micro exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Rapid Micro and RA Medical

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

The idea behind Rapid Micro Biosystems and RA Medical Systems 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.