Correlation Between ResMed and FOXO Technologies

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

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

Diversification Opportunities for ResMed and FOXO Technologies

0.03

Correlation Coefficient

ResMed  FOXO Technologies

Significant diversification

The 3 months correlation between ResMed and FOXO is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding ResMed Inc and FOXO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOXO Technologies and ResMed 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 ResMed Inc are associated (or correlated) with FOXO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOXO Technologies has no effect on the direction of ResMed i.e., ResMed and FOXO Technologies go up and down completely randomly.

Pair Corralation between ResMed and FOXO Technologies

Considering the 90-day investment horizon ResMed Inc is expected to generate 0.11 times more return on investment than FOXO Technologies. However, ResMed Inc is 9.01 times less risky than FOXO Technologies. It trades about -0.03 of its potential returns per unit of risk. FOXO Technologies is currently generating about -0.04 per unit of risk. If you would invest  24,869  in ResMed Inc on September 12, 2024 and sell it today you would lose (347.00) from holding ResMed Inc or give up 1.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

ResMed Inc  vs.  FOXO Technologies

ResMed Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

FOXO Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FOXO Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, FOXO Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ResMed and FOXO Technologies

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

The idea behind ResMed Inc and FOXO Technologies 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.