Correlation Between Daxor and ResMed

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

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

Diversification Opportunities for Daxor and ResMed

0.2

Correlation Coefficient

Daxor  ResMed

Modest diversification

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

Pair Corralation between Daxor and ResMed

Considering the 90-day investment horizon Daxor is expected to generate 0.89 times more return on investment than ResMed. However, Daxor is 1.12 times less risky than ResMed. It trades about 0.21 of its potential returns per unit of risk. ResMed Inc is currently generating about 0.17 per unit of risk. If you would invest  745.00  in Daxor on January 29, 2024 and sell it today you would earn a total of  220.00  from holding Daxor or generate 29.53% return on investment over 90 days.

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

Daxor  vs.  ResMed Inc

Daxor

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Daxor are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Daxor reported solid returns over the last few months and may actually be approaching a breakup point.

ResMed Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ResMed Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, ResMed exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Daxor and ResMed

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

The idea behind Daxor and ResMed 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.