Correlation Between Bruker and Pulmonx Corp

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

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

Diversification Opportunities for Bruker and Pulmonx Corp

0.69

Correlation Coefficient

Bruker  Pulmonx Corp

Poor diversification

The 3 months correlation between Bruker and Pulmonx is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bruker and Pulmonx Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulmonx Corp and Bruker 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 Bruker are associated (or correlated) with Pulmonx Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulmonx Corp has no effect on the direction of Bruker i.e., Bruker and Pulmonx Corp go up and down completely randomly.

Pair Corralation between Bruker and Pulmonx Corp

Given the investment horizon of 90 days Bruker is expected to under-perform the Pulmonx Corp. But the stock apears to be less risky and, when comparing its historical volatility, Bruker is 1.59 times less risky than Pulmonx Corp. The stock trades about -0.09 of its potential returns per unit of risk. The Pulmonx Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  829.00  in Pulmonx Corp on September 28, 2024 and sell it today you would lose (141.00) from holding Pulmonx Corp or give up 17.01% of portfolio value over 90 days.

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

Bruker  vs.  Pulmonx Corp

Bruker

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bruker has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pulmonx Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pulmonx Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Bruker and Pulmonx Corp

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

The idea behind Bruker and Pulmonx Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.