Correlation Between EMvision Medical and Avenira

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

Diversification Opportunities for EMvision Medical and Avenira

0.58

Correlation Coefficient

EMvision Medical  Avenira

Very weak diversification

The 3 months correlation between EMvision and Avenira is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding EMvision Medical Devices and Avenira in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avenira 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 Avenira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avenira has no effect on the direction of EMvision Medical i.e., EMvision Medical and Avenira go up and down completely randomly.

Pair Corralation between EMvision Medical and Avenira

Assuming the 90 days trading horizon EMvision Medical Devices is expected to generate 0.46 times more return on investment than Avenira. However, EMvision Medical Devices is 2.16 times less risky than Avenira. It trades about 0.06 of its potential returns per unit of risk. Avenira is currently generating about -0.14 per unit of risk. If you would invest  185.00  in EMvision Medical Devices on September 20, 2024 and sell it today you would earn a total of  5.00  from holding EMvision Medical Devices or generate 2.7% return on investment over 90 days.

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

EMvision Medical Devices  vs.  Avenira

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 comparatively stable basic indicators, EMvision Medical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Avenira

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avenira has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with EMvision Medical and Avenira

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

The idea behind EMvision Medical Devices and Avenira 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.