Correlation Between Viemed Healthcare and Retractable Technologies

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

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

Diversification Opportunities for Viemed Healthcare and Retractable Technologies

0.28

Correlation Coefficient

Viemed Healthcare  Retractable Technologies

Modest diversification

The 3 months correlation between Viemed and Retractable is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Retractable Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retractable Technologies and Viemed Healthcare 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 Viemed Healthcare are associated (or correlated) with Retractable Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retractable Technologies has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and Retractable Technologies go up and down completely randomly.

Pair Corralation between Viemed Healthcare and Retractable Technologies

Considering the 90-day investment horizon Viemed Healthcare is expected to under-perform the Retractable Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Viemed Healthcare is 2.23 times less risky than Retractable Technologies. The stock trades about -0.08 of its potential returns per unit of risk. The Retractable Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  70.00  in Retractable Technologies on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Retractable Technologies or generate 0.0% return on investment over 90 days.

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

Viemed Healthcare  vs.  Retractable Technologies

Viemed Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Viemed Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile 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.

Retractable Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Retractable Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Retractable Technologies is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Viemed Healthcare and Retractable Technologies

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

The idea behind Viemed Healthcare and Retractable Technologies 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.