Correlation Between Masimo and Penumbra
Can any of the company-specific risk be diversified away by investing in both Masimo and Penumbra 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 Penumbra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Masimo and Penumbra, you can compare the effects of market volatilities on Masimo and Penumbra 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 Penumbra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masimo and Penumbra.
Diversification Opportunities for Masimo and Penumbra
Average diversification
The 3 months correlation between Masimo and Penumbra is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Masimo and Penumbra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penumbra 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 Penumbra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penumbra has no effect on the direction of Masimo i.e., Masimo and Penumbra go up and down completely randomly.
Pair Corralation between Masimo and Penumbra
Given the investment horizon of 90 days Masimo is expected to generate 2.05 times less return on investment than Penumbra. But when comparing it to its historical volatility, Masimo is 1.53 times less risky than Penumbra. It trades about 0.04 of its potential returns per unit of risk. Penumbra is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 26,950 in Penumbra on September 2, 2025 and sell it today you would earn a total of 2,342 from holding Penumbra or generate 8.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Masimo vs. Penumbra
Performance |
| Timeline |
| Masimo |
| Penumbra |
Masimo and Penumbra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Masimo and Penumbra
The main advantage of trading using opposite Masimo and Penumbra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masimo position performs unexpectedly, Penumbra 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 Penumbra will offset losses from the drop in Penumbra's long position.| Masimo vs. Urban Outfitters | Masimo vs. Active Health Foods | Masimo vs. Fevertree Drinks Plc | Masimo vs. Naked Wines plc |
| Penumbra vs. Avidus Management Group | Penumbra vs. Commercial Vehicle Group | Penumbra vs. Xiabuxiabu Catering Management | Penumbra vs. Strategic Management and |
Check out your portfolio center.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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