Correlation Between Outset Medical and EnVVeno Medical

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

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

Diversification Opportunities for Outset Medical and EnVVeno Medical

-0.48

Correlation Coefficient

Outset Medical  EnVVeno Medical

Very good diversification

The 3 months correlation between Outset and EnVVeno is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and enVVeno Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enVVeno Medical Corp 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 EnVVeno Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enVVeno Medical Corp has no effect on the direction of Outset Medical i.e., Outset Medical and EnVVeno Medical go up and down completely randomly.

Pair Corralation between Outset Medical and EnVVeno Medical

Allowing for the 90-day total investment horizon Outset Medical is expected to generate 1.64 times more return on investment than EnVVeno Medical. However, Outset Medical is 1.64 times more volatile than enVVeno Medical Corp. It trades about 0.21 of its potential returns per unit of risk. enVVeno Medical Corp is currently generating about -0.19 per unit of risk. If you would invest  52.00  in Outset Medical on September 14, 2024 and sell it today you would earn a total of  69.00  from holding Outset Medical or generate 132.69% return on investment over 90 days.

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

Outset Medical  vs.  enVVeno Medical Corp

Outset Medical

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Outset Medical are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting primary indicators, Outset Medical displayed solid returns over the last few months and may actually be approaching a breakup point.

enVVeno Medical Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days enVVeno Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Outset Medical and EnVVeno Medical

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

The idea behind Outset Medical and enVVeno Medical Corp 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.