Correlation Between STRATA Skin and Nu Med
Can any of the company-specific risk be diversified away by investing in both STRATA Skin and Nu Med 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 STRATA Skin and Nu Med into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRATA Skin Sciences and Nu Med Plus, you can compare the effects of market volatilities on STRATA Skin and Nu Med 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 STRATA Skin with a short position of Nu Med. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRATA Skin and Nu Med.
Diversification Opportunities for STRATA Skin and Nu Med
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STRATA and NUMD is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding STRATA Skin Sciences and Nu Med Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nu Med Plus and STRATA Skin 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 STRATA Skin Sciences are associated (or correlated) with Nu Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nu Med Plus has no effect on the direction of STRATA Skin i.e., STRATA Skin and Nu Med go up and down completely randomly.
Pair Corralation between STRATA Skin and Nu Med
Given the investment horizon of 90 days STRATA Skin Sciences is expected to generate 0.13 times more return on investment than Nu Med. However, STRATA Skin Sciences is 7.59 times less risky than Nu Med. It trades about 0.02 of its potential returns per unit of risk. Nu Med Plus is currently generating about -0.12 per unit of risk. If you would invest 305.00 in STRATA Skin Sciences on October 10, 2024 and sell it today you would earn a total of 2.00 from holding STRATA Skin Sciences or generate 0.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
STRATA Skin Sciences vs. Nu Med Plus
Performance |
Timeline |
STRATA Skin Sciences |
Nu Med Plus |
STRATA Skin and Nu Med Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with STRATA Skin and Nu Med
The main advantage of trading using opposite STRATA Skin and Nu Med positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRATA Skin position performs unexpectedly, Nu Med 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 Nu Med will offset losses from the drop in Nu Med's long position.STRATA Skin vs. Axogen Inc | STRATA Skin vs. Ainos Inc | STRATA Skin vs. LENSAR Inc | STRATA Skin vs. Nexalin Technology |
Check out your portfolio center.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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