Correlation Between Thermogenesis Holdings and RA Medical

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

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

Diversification Opportunities for Thermogenesis Holdings and RA Medical

0.78

Correlation Coefficient

Thermogenesis Holdings  RA Medical

Poor diversification

The 3 months correlation between Thermogenesis and RMED is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Thermogenesis Holdings 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 Thermogenesis Holdings 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 Thermogenesis Holdings 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 Thermogenesis Holdings i.e., Thermogenesis Holdings and RA Medical go up and down completely randomly.

Pair Corralation between Thermogenesis Holdings and RA Medical

If you would invest  68.00  in RA Medical Systems on October 27, 2024 and sell it today you would earn a total of  0.00  from holding RA Medical Systems or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Thermogenesis Holdings  vs.  RA Medical Systems

Thermogenesis Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thermogenesis Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Thermogenesis Holdings is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

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 Thermogenesis Holdings and RA Medical

The main advantage of trading using opposite Thermogenesis Holdings and RA Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermogenesis Holdings 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 Thermogenesis Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.