Correlation Between ResMed and Coloplast A/S
Can any of the company-specific risk be diversified away by investing in both ResMed and Coloplast A/S 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 Coloplast A/S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ResMed Inc and Coloplast AS, you can compare the effects of market volatilities on ResMed and Coloplast A/S 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 Coloplast A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of ResMed and Coloplast A/S.
Diversification Opportunities for ResMed and Coloplast A/S
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ResMed and Coloplast is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding ResMed Inc and Coloplast AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloplast A/S 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 Coloplast A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloplast A/S has no effect on the direction of ResMed i.e., ResMed and Coloplast A/S go up and down completely randomly.
Pair Corralation between ResMed and Coloplast A/S
Assuming the 90 days horizon ResMed Inc is expected to generate 0.73 times more return on investment than Coloplast A/S. However, ResMed Inc is 1.38 times less risky than Coloplast A/S. It trades about 0.2 of its potential returns per unit of risk. Coloplast AS is currently generating about -0.09 per unit of risk. If you would invest 18,501 in ResMed Inc on April 22, 2025 and sell it today you would earn a total of 3,729 from holding ResMed Inc or generate 20.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ResMed Inc vs. Coloplast AS
Performance |
Timeline |
ResMed Inc |
Coloplast A/S |
ResMed and Coloplast A/S Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ResMed and Coloplast A/S
The main advantage of trading using opposite ResMed and Coloplast A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ResMed position performs unexpectedly, Coloplast A/S 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 Coloplast A/S will offset losses from the drop in Coloplast A/S's long position.ResMed vs. Zoom Video Communications | ResMed vs. Entravision Communications | ResMed vs. Ameriprise Financial | ResMed vs. CVB Financial Corp |
Coloplast A/S vs. NATIONAL HEALTHCARE | Coloplast A/S vs. Wenzhou Kangning Hospital | Coloplast A/S vs. United Utilities Group | Coloplast A/S vs. US Physical Therapy |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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