Correlation Between EMvision Medical and Auswide Bank

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

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

Diversification Opportunities for EMvision Medical and Auswide Bank

-0.37

Correlation Coefficient

EMvision Medical  Auswide Bank

Very good diversification

The 3 months correlation between EMvision and Auswide is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding EMvision Medical Devices and Auswide Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auswide Bank and EMvision Medical 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 EMvision Medical Devices are associated (or correlated) with Auswide Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auswide Bank has no effect on the direction of EMvision Medical i.e., EMvision Medical and Auswide Bank go up and down completely randomly.

Pair Corralation between EMvision Medical and Auswide Bank

Assuming the 90 days trading horizon EMvision Medical Devices is expected to under-perform the Auswide Bank. In addition to that, EMvision Medical is 1.5 times more volatile than Auswide Bank. It trades about -0.07 of its total potential returns per unit of risk. Auswide Bank is currently generating about 0.06 per unit of volatility. If you would invest  414.00  in Auswide Bank on September 4, 2024 and sell it today you would earn a total of  26.00  from holding Auswide Bank or generate 6.28% return on investment over 90 days.

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

EMvision Medical Devices  vs.  Auswide Bank

EMvision Medical Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EMvision Medical Devices has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Auswide Bank

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Auswide Bank are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Auswide Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with EMvision Medical and Auswide Bank

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

The idea behind EMvision Medical Devices and Auswide Bank 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.