Correlation Between Innovative Eyewear and G Medical

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

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

Diversification Opportunities for Innovative Eyewear and G Medical

0.13

Correlation Coefficient

Innovative Eyewear  G Medical

Average diversification

The 3 months correlation between Innovative and GMVDW is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Eyewear and G Medical Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Medical Innovations and Innovative Eyewear 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 Innovative Eyewear are associated (or correlated) with G Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Medical Innovations has no effect on the direction of Innovative Eyewear i.e., Innovative Eyewear and G Medical go up and down completely randomly.

Pair Corralation between Innovative Eyewear and G Medical

If you would invest  503.00  in Innovative Eyewear on August 30, 2024 and sell it today you would earn a total of  148.00  from holding Innovative Eyewear or generate 29.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Innovative Eyewear  vs.  G Medical Innovations

Innovative Eyewear

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Innovative Eyewear are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, Innovative Eyewear showed solid returns over the last few months and may actually be approaching a breakup point.

G Medical Innovations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Medical Innovations has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, G Medical is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Innovative Eyewear and G Medical

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

The idea behind Innovative Eyewear and G Medical Innovations 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.