Correlation Between Retractable Technologies and PAVmed

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

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

Diversification Opportunities for Retractable Technologies and PAVmed

0.5

Correlation Coefficient

Retractable Technologies  PAVmed

Very weak diversification

The 3 months correlation between Retractable and PAVmed is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Retractable Technologies and PAVmed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAVmed Inc and Retractable Technologies 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 Retractable Technologies are associated (or correlated) with PAVmed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAVmed Inc has no effect on the direction of Retractable Technologies i.e., Retractable Technologies and PAVmed go up and down completely randomly.

Pair Corralation between Retractable Technologies and PAVmed

Considering the 90-day investment horizon Retractable Technologies is expected to under-perform the PAVmed. But the stock apears to be less risky and, when comparing its historical volatility, Retractable Technologies is 2.53 times less risky than PAVmed. The stock trades about -0.18 of its potential returns per unit of risk. The PAVmed Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  119.00  in PAVmed Inc on September 3, 2024 and sell it today you would lose (22.00) from holding PAVmed Inc or give up 18.49% of portfolio value over 90 days.

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

Retractable Technologies  vs.  PAVmed Inc

Retractable Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Retractable Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

PAVmed Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PAVmed Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, PAVmed is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Retractable Technologies and PAVmed

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

The idea behind Retractable Technologies and PAVmed Inc 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.