Correlation Between EDAP TMS and Integer Holdings

Can any of the company-specific risk be diversified away by investing in both EDAP TMS and Integer Holdings 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 Integer Holdings 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 Integer Holdings Corp, you can compare the effects of market volatilities on EDAP TMS and Integer Holdings 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 Integer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDAP TMS and Integer Holdings.

Diversification Opportunities for EDAP TMS and Integer Holdings

-0.7

Correlation Coefficient

EDAP TMS  Integer Holdings

Excellent diversification

The 3 months correlation between EDAP and Integer is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding EDAP TMS SA and Integer Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integer Holdings Corp 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 Integer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integer Holdings Corp has no effect on the direction of EDAP TMS i.e., EDAP TMS and Integer Holdings go up and down completely randomly.

Pair Corralation between EDAP TMS and Integer Holdings

Given the investment horizon of 90 days EDAP TMS SA is expected to under-perform the Integer Holdings. In addition to that, EDAP TMS is 2.16 times more volatile than Integer Holdings Corp. It trades about -0.16 of its total potential returns per unit of risk. Integer Holdings Corp is currently generating about 0.1 per unit of volatility. If you would invest  12,678  in Integer Holdings Corp on September 13, 2024 and sell it today you would earn a total of  1,251  from holding Integer Holdings Corp or generate 9.87% return on investment over 90 days.

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

EDAP TMS SA  vs.  Integer Holdings Corp

EDAP TMS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EDAP TMS SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators 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.

Integer Holdings Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integer Holdings Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical and fundamental indicators, Integer Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with EDAP TMS and Integer Holdings

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

The idea behind EDAP TMS SA and Integer Holdings 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.