Correlation Between Nemaura Medical and SANUWAVE Health

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

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

Diversification Opportunities for Nemaura Medical and SANUWAVE Health

0.2

Correlation Coefficient

Nemaura Medical  SANUWAVE Health

Modest diversification

The 3 months correlation between Nemaura and SANUWAVE is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Nemaura Medical and SANUWAVE Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANUWAVE Health and Nemaura 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 Nemaura Medical are associated (or correlated) with SANUWAVE Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANUWAVE Health has no effect on the direction of Nemaura Medical i.e., Nemaura Medical and SANUWAVE Health go up and down completely randomly.

Pair Corralation between Nemaura Medical and SANUWAVE Health

If you would invest  1,050  in SANUWAVE Health on September 23, 2024 and sell it today you would earn a total of  1,300  from holding SANUWAVE Health or generate 123.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

Nemaura Medical  vs.  SANUWAVE Health

Nemaura Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nemaura Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Nemaura Medical is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

SANUWAVE Health

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SANUWAVE Health are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SANUWAVE Health showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nemaura Medical and SANUWAVE Health

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

The idea behind Nemaura Medical and SANUWAVE 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..