Correlation Between Outset MedicalInc and Movano

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

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

Diversification Opportunities for Outset MedicalInc and Movano

0.86

Correlation Coefficient

Outset MedicalInc  Movano

Very poor diversification

The 3 months correlation between Outset and Movano is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Outset MedicalInc and Movano Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Movano Inc and Outset MedicalInc 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 Outset MedicalInc are associated (or correlated) with Movano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Movano Inc has no effect on the direction of Outset MedicalInc i.e., Outset MedicalInc and Movano go up and down completely randomly.

Pair Corralation between Outset MedicalInc and Movano

Allowing for the 90-day total investment horizon Outset MedicalInc is expected to under-perform the Movano. In addition to that, Outset MedicalInc is 1.15 times more volatile than Movano Inc. It trades about -0.1 of its total potential returns per unit of risk. Movano Inc is currently generating about -0.03 per unit of volatility. If you would invest  101.00  in Movano Inc on January 20, 2024 and sell it today you would lose (53.00) from holding Movano Inc or give up 52.48% of portfolio value over 90 days.

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

Outset MedicalInc  vs.  Movano Inc

Outset MedicalInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Outset MedicalInc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Movano Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Movano Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Outset MedicalInc and Movano

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

The idea behind Outset MedicalInc and Movano Inc 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.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.