Correlation Between Embecta Corp and Outset Medical

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

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

Diversification Opportunities for Embecta Corp and Outset Medical

-0.54

Correlation Coefficient

Embecta Corp  Outset Medical

Excellent diversification

The 3 months correlation between Embecta and Outset is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Embecta Corp and Outset Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outset Medical and Embecta Corp 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 Embecta Corp are associated (or correlated) with Outset Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outset Medical has no effect on the direction of Embecta Corp i.e., Embecta Corp and Outset Medical go up and down completely randomly.

Pair Corralation between Embecta Corp and Outset Medical

Given the investment horizon of 90 days Embecta Corp is expected to generate 0.8 times more return on investment than Outset Medical. However, Embecta Corp is 1.25 times less risky than Outset Medical. It trades about 0.13 of its potential returns per unit of risk. Outset Medical is currently generating about -0.1 per unit of risk. If you would invest  1,058  in Embecta Corp on July 22, 2025 and sell it today you would earn a total of  298.00  from holding Embecta Corp or generate 28.17% return on investment over 90 days.

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

Embecta Corp  vs.  Outset Medical

Embecta Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Embecta Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, Embecta Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Outset Medical

Risk-Adjusted Performance

Weakest

Over the last 90 days Outset Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in November 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Embecta Corp and Outset Medical

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

The idea behind Embecta Corp and Outset Medical 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.