Correlation Between Globus Medical and Echo Therapeutics
Can any of the company-specific risk be diversified away by investing in both Globus Medical and Echo Therapeutics 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 Globus Medical and Echo Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globus Medical and Echo Therapeutics, you can compare the effects of market volatilities on Globus Medical and Echo Therapeutics 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 Globus Medical with a short position of Echo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globus Medical and Echo Therapeutics.
Diversification Opportunities for Globus Medical and Echo Therapeutics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Globus and Echo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Globus Medical and Echo Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echo Therapeutics and Globus 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 Globus Medical are associated (or correlated) with Echo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echo Therapeutics has no effect on the direction of Globus Medical i.e., Globus Medical and Echo Therapeutics go up and down completely randomly.
Pair Corralation between Globus Medical and Echo Therapeutics
If you would invest 5,115 in Globus Medical on January 25, 2024 and sell it today you would earn a total of 12.00 from holding Globus Medical or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Globus Medical vs. Echo Therapeutics
Performance |
| Timeline |
| Globus Medical |
| Echo Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Globus Medical and Echo Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globus Medical and Echo Therapeutics
The main advantage of trading using opposite Globus Medical and Echo Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globus Medical position performs unexpectedly, Echo Therapeutics 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 Echo Therapeutics will offset losses from the drop in Echo Therapeutics' long position.| Globus Medical vs. HealthStream | Globus Medical vs. National Research Corp | Globus Medical vs. HealthEquity | Globus Medical vs. Health Catalyst |
| Echo Therapeutics vs. Eterna Therapeutics | Echo Therapeutics vs. Acumen Pharmaceuticals | Echo Therapeutics vs. Catalyst Pharmaceuticals | Echo Therapeutics vs. Tarsus PharmaceuticalsInc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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