Correlation Between Paragon 28 and Aspira Womens

Can any of the company-specific risk be diversified away by investing in both Paragon 28 and Aspira Womens 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 Paragon 28 and Aspira Womens into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Paragon 28 and Aspira Womens Health, you can compare the effects of market volatilities on Paragon 28 and Aspira Womens 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 Paragon 28 with a short position of Aspira Womens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paragon 28 and Aspira Womens.

Diversification Opportunities for Paragon 28 and Aspira Womens

-0.33

Correlation Coefficient

Paragon 28  Aspira Womens

Very good diversification

The 3 months correlation between Paragon and Aspira is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Paragon 28 and Aspira Womens Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspira Womens Health and Paragon 28 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 Paragon 28 are associated (or correlated) with Aspira Womens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspira Womens Health has no effect on the direction of Paragon 28 i.e., Paragon 28 and Aspira Womens go up and down completely randomly.

Pair Corralation between Paragon 28 and Aspira Womens

Considering the 90-day investment horizon Paragon 28 is expected to generate 1.26 times more return on investment than Aspira Womens. However, Paragon 28 is 1.26 times more volatile than Aspira Womens Health. It trades about 0.08 of its potential returns per unit of risk. Aspira Womens Health is currently generating about -0.01 per unit of risk. If you would invest  820.00  in Paragon 28 on August 31, 2024 and sell it today you would earn a total of  211.00  from holding Paragon 28 or generate 25.73% return on investment over 90 days.

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

Paragon 28  vs.  Aspira Womens Health

Paragon 28

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Paragon 28 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Paragon 28 sustained solid returns over the last few months and may actually be approaching a breakup point.

Aspira Womens Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aspira Womens Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Aspira Womens is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Paragon 28 and Aspira Womens

The main advantage of trading using opposite Paragon 28 and Aspira Womens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paragon 28 position performs unexpectedly, Aspira Womens 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 Aspira Womens will offset losses from the drop in Aspira Womens' long position.

The idea behind Paragon 28 and Aspira Womens Health 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.