Correlation Between Masimo and Rambus

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

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

Diversification Opportunities for Masimo and Rambus

-0.48

Correlation Coefficient

Masimo  Rambus

Very good diversification

The 3 months correlation between Masimo and Rambus is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Masimo and Rambus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rambus Inc and Masimo 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 Masimo are associated (or correlated) with Rambus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rambus Inc has no effect on the direction of Masimo i.e., Masimo and Rambus go up and down completely randomly.

Pair Corralation between Masimo and Rambus

Given the investment horizon of 90 days Masimo is expected to under-perform the Rambus. But the stock apears to be less risky and, when comparing its historical volatility, Masimo is 1.85 times less risky than Rambus. The stock trades about -0.06 of its potential returns per unit of risk. The Rambus Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  6,595  in Rambus Inc on July 23, 2025 and sell it today you would earn a total of  3,182  from holding Rambus Inc or generate 48.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Masimo  vs.  Rambus Inc

Masimo

Risk-Adjusted Performance

Weakest

Over the last 90 days Masimo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Rambus Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rambus Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent fundamental drivers, Rambus unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Masimo and Rambus

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

The idea behind Masimo and Rambus 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.