Correlation Between ResMed and Stereotaxis

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

By analyzing existing cross correlation between ResMed Inc and Stereotaxis, you can compare the effects of market volatilities on ResMed and Stereotaxis 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 Stereotaxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of ResMed and Stereotaxis.

Diversification Opportunities for ResMed and Stereotaxis

0.66

Correlation Coefficient

ResMed  Stereotaxis

Poor diversification

The 3 months correlation between ResMed and Stereotaxis is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ResMed Inc and Stereotaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stereotaxis 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 Stereotaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stereotaxis has no effect on the direction of ResMed i.e., ResMed and Stereotaxis go up and down completely randomly.

Pair Corralation between ResMed and Stereotaxis

Considering the 90-day investment horizon ResMed Inc is expected to generate 0.27 times more return on investment than Stereotaxis. However, ResMed Inc is 3.74 times less risky than Stereotaxis. It trades about 0.26 of its potential returns per unit of risk. Stereotaxis is currently generating about 0.07 per unit of risk. If you would invest  24,014  in ResMed Inc on May 5, 2025 and sell it today you would earn a total of  3,906  from holding ResMed Inc or generate 16.27% return on investment over 90 days.

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

ResMed Inc  vs.  Stereotaxis

ResMed Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ResMed Inc are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, ResMed exhibited solid returns over the last few months and may actually be approaching a breakup point.

Stereotaxis

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Stereotaxis are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Stereotaxis unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ResMed and Stereotaxis

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

The idea behind ResMed Inc and Stereotaxis 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..