Correlation Between Outset Medical and Nano X

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

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

Diversification Opportunities for Outset Medical and Nano X

0.77

Correlation Coefficient

Outset Medical  Nano X

Poor diversification

The 3 months correlation between Outset and Nano is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and Nano X Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano X Imaging and Outset 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 Outset Medical are associated (or correlated) with Nano X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano X Imaging has no effect on the direction of Outset Medical i.e., Outset Medical and Nano X go up and down completely randomly.

Pair Corralation between Outset Medical and Nano X

Allowing for the 90-day total investment horizon Outset Medical is expected to under-perform the Nano X. In addition to that, Outset Medical is 1.05 times more volatile than Nano X Imaging. It trades about -0.05 of its total potential returns per unit of risk. Nano X Imaging is currently generating about 0.03 per unit of volatility. If you would invest  713.00  in Nano X Imaging on September 22, 2024 and sell it today you would lose (37.00) from holding Nano X Imaging or give up 5.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Outset Medical  vs.  Nano X Imaging

Outset Medical

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Outset Medical are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Outset Medical displayed solid returns over the last few months and may actually be approaching a breakup point.

Nano X Imaging

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nano X Imaging are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Nano X showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Outset Medical and Nano X

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

The idea behind Outset Medical and Nano X Imaging 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.