Correlation Between SINTX Technologies and ReShape Lifesciences

Can any of the company-specific risk be diversified away by investing in both SINTX Technologies and ReShape Lifesciences 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 SINTX Technologies and ReShape Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for SINTX Technologies and ReShape Lifesciences

-0.01

Correlation Coefficient

SINTX Technologies  ReShape Lifesciences

Good diversification

The 3 months correlation between SINTX and ReShape is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SINTX Technologies and ReShape Lifesciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReShape Lifesciences and SINTX Technologies 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 SINTX Technologies are associated (or correlated) with ReShape Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReShape Lifesciences has no effect on the direction of SINTX Technologies i.e., SINTX Technologies and ReShape Lifesciences go up and down completely randomly.

Pair Corralation between SINTX Technologies and ReShape Lifesciences

Given the investment horizon of 90 days SINTX Technologies is expected to generate 1.05 times more return on investment than ReShape Lifesciences. However, SINTX Technologies is 1.05 times more volatile than ReShape Lifesciences. It trades about 0.01 of its potential returns per unit of risk. ReShape Lifesciences is currently generating about -0.3 per unit of risk. If you would invest  358.00  in SINTX Technologies on December 29, 2024 and sell it today you would lose (66.00) from holding SINTX Technologies or give up 18.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

SINTX Technologies  vs.  ReShape Lifesciences

SINTX Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days SINTX Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain basic indicators, SINTX Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

ReShape Lifesciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days ReShape Lifesciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with SINTX Technologies and ReShape Lifesciences

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

The idea behind SINTX Technologies and ReShape Lifesciences 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.