Correlation Between SANUWAVE Health and Dynatronics

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

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

Diversification Opportunities for SANUWAVE Health and Dynatronics

-0.73

Correlation Coefficient

SANUWAVE Health  Dynatronics

Pay attention - limited upside

The 3 months correlation between SANUWAVE and Dynatronics is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SANUWAVE Health and Dynatronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynatronics and SANUWAVE Health 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 SANUWAVE Health are associated (or correlated) with Dynatronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynatronics has no effect on the direction of SANUWAVE Health i.e., SANUWAVE Health and Dynatronics go up and down completely randomly.

Pair Corralation between SANUWAVE Health and Dynatronics

If you would invest  1,700  in SANUWAVE Health on October 24, 2024 and sell it today you would earn a total of  1,030  from holding SANUWAVE Health or generate 60.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.67%
Values	Daily Returns

SANUWAVE Health  vs.  Dynatronics

SANUWAVE Health

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SANUWAVE Health are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SANUWAVE Health showed solid returns over the last few months and may actually be approaching a breakup point.

Dynatronics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SANUWAVE Health and Dynatronics

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

The idea behind SANUWAVE Health and Dynatronics 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.