Correlation Between Utah Medical and Wearable Health

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

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

Diversification Opportunities for Utah Medical and Wearable Health

-0.14

Correlation Coefficient

Utah Medical  Wearable Health

Good diversification

The 3 months correlation between Utah and Wearable is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Utah Medical Products and Wearable Health Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wearable Health Solutions and Utah 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 Utah Medical Products are associated (or correlated) with Wearable Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wearable Health Solutions has no effect on the direction of Utah Medical i.e., Utah Medical and Wearable Health go up and down completely randomly.

Pair Corralation between Utah Medical and Wearable Health

Given the investment horizon of 90 days Utah Medical is expected to generate 248.99 times less return on investment than Wearable Health. But when comparing it to its historical volatility, Utah Medical Products is 101.67 times less risky than Wearable Health. It trades about 0.05 of its potential returns per unit of risk. Wearable Health Solutions is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Wearable Health Solutions on May 6, 2025 and sell it today you would earn a total of  0.00  from holding Wearable Health Solutions or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Utah Medical Products  vs.  Wearable Health Solutions

Utah Medical Products

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Utah Medical Products are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Utah Medical is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Wearable Health Solutions

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wearable Health Solutions are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Wearable Health demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Utah Medical and Wearable Health

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

The idea behind Utah Medical Products and Wearable Health Solutions 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.