Correlation Between Utah Medical and Daxor

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

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

Diversification Opportunities for Utah Medical and Daxor

0.85

Correlation Coefficient

Utah Medical  Daxor

Very poor diversification

The 3 months correlation between Utah and Daxor is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Utah Medical Products and Daxor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daxor and Utah Medical 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 Utah Medical Products are associated (or correlated) with Daxor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daxor has no effect on the direction of Utah Medical i.e., Utah Medical and Daxor go up and down completely randomly.

Pair Corralation between Utah Medical and Daxor

Given the investment horizon of 90 days Utah Medical Products is expected to under-perform the Daxor. But the stock apears to be less risky and, when comparing its historical volatility, Utah Medical Products is 2.64 times less risky than Daxor. The stock trades about -0.15 of its potential returns per unit of risk. The Daxor is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  769.00  in Daxor on December 2, 2024 and sell it today you would lose (13.00) from holding Daxor or give up 1.69% of portfolio value over 90 days.

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

Utah Medical Products  vs.  Daxor

Utah Medical Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days Utah Medical Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Daxor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Daxor has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Utah Medical and Daxor

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

The idea behind Utah Medical Products and Daxor 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.