Correlation Between PulmonxCorp and Iradimed

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

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

Diversification Opportunities for PulmonxCorp and Iradimed

0.68

Correlation Coefficient

PulmonxCorp  Iradimed

Poor diversification

The 3 months correlation between PulmonxCorp and Iradimed is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding PulmonxCorp and Iradimed Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iradimed and PulmonxCorp 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 PulmonxCorp are associated (or correlated) with Iradimed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iradimed has no effect on the direction of PulmonxCorp i.e., PulmonxCorp and Iradimed go up and down completely randomly.

Pair Corralation between PulmonxCorp and Iradimed

Given the investment horizon of 90 days PulmonxCorp is expected to generate 1.67 times less return on investment than Iradimed. In addition to that, PulmonxCorp is 1.41 times more volatile than Iradimed Co. It trades about 0.03 of its total potential returns per unit of risk. Iradimed Co is currently generating about 0.07 per unit of volatility. If you would invest  2,780  in Iradimed Co on February 5, 2024 and sell it today you would earn a total of  1,690  from holding Iradimed Co or generate 60.79% return on investment over 90 days.

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

PulmonxCorp  vs.  Iradimed Co

PulmonxCorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PulmonxCorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Iradimed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PulmonxCorp and Iradimed

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

The idea behind PulmonxCorp and Iradimed Co 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.