Correlation Between EDAP TMS and Simulations Plus
Can any of the company-specific risk be diversified away by investing in both EDAP TMS and Simulations Plus 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 EDAP TMS and Simulations Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EDAP TMS SA and Simulations Plus, you can compare the effects of market volatilities on EDAP TMS and Simulations Plus 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 EDAP TMS with a short position of Simulations Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDAP TMS and Simulations Plus.
Diversification Opportunities for EDAP TMS and Simulations Plus
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EDAP and Simulations is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding EDAP TMS SA and Simulations Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simulations Plus and EDAP TMS 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 EDAP TMS SA are associated (or correlated) with Simulations Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simulations Plus has no effect on the direction of EDAP TMS i.e., EDAP TMS and Simulations Plus go up and down completely randomly.
Pair Corralation between EDAP TMS and Simulations Plus
Given the investment horizon of 90 days EDAP TMS SA is expected to under-perform the Simulations Plus. In addition to that, EDAP TMS is 1.34 times more volatile than Simulations Plus. It trades about -0.01 of its total potential returns per unit of risk. Simulations Plus is currently generating about 0.02 per unit of volatility. If you would invest 4,302 in Simulations Plus on January 24, 2024 and sell it today you would earn a total of 214.00 from holding Simulations Plus or generate 4.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
EDAP TMS SA vs. Simulations Plus
Performance |
Timeline |
EDAP TMS SA |
Simulations Plus |
EDAP TMS and Simulations Plus Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EDAP TMS and Simulations Plus
The main advantage of trading using opposite EDAP TMS and Simulations Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EDAP TMS position performs unexpectedly, Simulations Plus 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 Simulations Plus will offset losses from the drop in Simulations Plus' long position.EDAP TMS vs. HealthStream | EDAP TMS vs. National Research Corp | EDAP TMS vs. HealthEquity | EDAP TMS vs. Health Catalyst |
Simulations Plus vs. National Research Corp | Simulations Plus vs. Privia Health Group | Simulations Plus vs. Forian Inc | Simulations Plus vs. HealthEquity |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Fundamental Analysis View fundamental data based on most recent published financial statements |