Correlation Between ResMed and Endologix
Can any of the company-specific risk be diversified away by investing in both ResMed and Endologix 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 ResMed and Endologix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ResMed Inc and Endologix, you can compare the effects of market volatilities on ResMed and Endologix 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 ResMed with a short position of Endologix. Check out your portfolio center. Please also check ongoing floating volatility patterns of ResMed and Endologix.
Diversification Opportunities for ResMed and Endologix
Pay attention - limited upside
The 3 months correlation between ResMed and Endologix is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ResMed Inc and Endologix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endologix and ResMed 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 ResMed Inc are associated (or correlated) with Endologix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endologix has no effect on the direction of ResMed i.e., ResMed and Endologix go up and down completely randomly.
Pair Corralation between ResMed and Endologix
If you would invest 18,375 in ResMed Inc on February 8, 2024 and sell it today you would earn a total of 3,241 from holding ResMed Inc or generate 17.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
ResMed Inc vs. Endologix
Performance |
| Timeline |
| ResMed Inc |
| Endologix |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ResMed and Endologix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ResMed and Endologix
The main advantage of trading using opposite ResMed and Endologix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ResMed position performs unexpectedly, Endologix 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 Endologix will offset losses from the drop in Endologix's long position.The idea behind ResMed Inc and Endologix 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.| Endologix vs. Biglari Holdings | Endologix vs. Playtika Holding Corp | Endologix vs. Sonos Inc | Endologix vs. Hasbro Inc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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