Correlation Between Sharps Technology and Baxter International
Can any of the company-specific risk be diversified away by investing in both Sharps Technology and Baxter International 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 Sharps Technology and Baxter International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sharps Technology and Baxter International, you can compare the effects of market volatilities on Sharps Technology and Baxter International 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 Sharps Technology with a short position of Baxter International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sharps Technology and Baxter International.
Diversification Opportunities for Sharps Technology and Baxter International
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sharps and Baxter is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sharps Technology and Baxter International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baxter International and Sharps Technology 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 Sharps Technology are associated (or correlated) with Baxter International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baxter International has no effect on the direction of Sharps Technology i.e., Sharps Technology and Baxter International go up and down completely randomly.
Pair Corralation between Sharps Technology and Baxter International
Given the investment horizon of 90 days Sharps Technology is expected to under-perform the Baxter International. In addition to that, Sharps Technology is 5.29 times more volatile than Baxter International. It trades about -0.15 of its total potential returns per unit of risk. Baxter International is currently generating about -0.18 per unit of volatility. If you would invest 3,901 in Baxter International on September 10, 2024 and sell it today you would lose (675.50) from holding Baxter International or give up 17.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sharps Technology vs. Baxter International
Performance |
Timeline |
Sharps Technology |
Baxter International |
Sharps Technology and Baxter International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sharps Technology and Baxter International
The main advantage of trading using opposite Sharps Technology and Baxter International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sharps Technology position performs unexpectedly, Baxter International 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 Baxter International will offset losses from the drop in Baxter International's long position.Sharps Technology vs. JIN MEDICAL INTERNATIONAL | Sharps Technology vs. Meihua International Medical | Sharps Technology vs. GlucoTrack | Sharps Technology vs. Innovative Eyewear |
Baxter International vs. Embecta Corp | Baxter International vs. West Pharmaceutical Services | Baxter International vs. ResMed Inc | Baxter International vs. The Cooper Companies, |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |