Correlation Between Venus Concept and EDAP TMS

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

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

Diversification Opportunities for Venus Concept and EDAP TMS

-0.27

Correlation Coefficient

Venus Concept  EDAP TMS

Very good diversification

The 3 months correlation between Venus and EDAP is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Venus Concept and EDAP TMS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDAP TMS SA and Venus Concept 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 Venus Concept are associated (or correlated) with EDAP TMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDAP TMS SA has no effect on the direction of Venus Concept i.e., Venus Concept and EDAP TMS go up and down completely randomly.

Pair Corralation between Venus Concept and EDAP TMS

Given the investment horizon of 90 days Venus Concept is expected to generate 1.65 times more return on investment than EDAP TMS. However, Venus Concept is 1.65 times more volatile than EDAP TMS SA. It trades about 0.04 of its potential returns per unit of risk. EDAP TMS SA is currently generating about -0.19 per unit of risk. If you would invest  244.00  in Venus Concept on May 4, 2025 and sell it today you would earn a total of  8.00  from holding Venus Concept or generate 3.28% return on investment over 90 days.

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

Venus Concept  vs.  EDAP TMS SA

Venus Concept

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Venus Concept are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Venus Concept displayed solid returns over the last few months and may actually be approaching a breakup point.

EDAP TMS SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days EDAP TMS SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Venus Concept and EDAP TMS

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

The idea behind Venus Concept and EDAP TMS SA 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.