Correlation Between Outset Medical and Heartbeam

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

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

Diversification Opportunities for Outset Medical and Heartbeam

-0.4

Correlation Coefficient

Outset Medical  Heartbeam

Very good diversification

The 3 months correlation between Outset and Heartbeam is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and Heartbeam in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartbeam and Outset Medical 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 Outset Medical are associated (or correlated) with Heartbeam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartbeam has no effect on the direction of Outset Medical i.e., Outset Medical and Heartbeam go up and down completely randomly.

Pair Corralation between Outset Medical and Heartbeam

Allowing for the 90-day total investment horizon Outset Medical is expected to generate 1.8 times more return on investment than Heartbeam. However, Outset Medical is 1.8 times more volatile than Heartbeam. It trades about 0.06 of its potential returns per unit of risk. Heartbeam is currently generating about -0.16 per unit of risk. If you would invest  1,217  in Outset Medical on May 6, 2025 and sell it today you would earn a total of  287.00  from holding Outset Medical or generate 23.58% return on investment over 90 days.

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

Outset Medical  vs.  Heartbeam

Outset Medical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Outset Medical are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Outset Medical displayed solid returns over the last few months and may actually be approaching a breakup point.

Heartbeam

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heartbeam has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Outset Medical and Heartbeam

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

The idea behind Outset Medical and Heartbeam 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.