Correlation Between Abbott Laboratories and Artivion
Can any of the company-specific risk be diversified away by investing in both Abbott Laboratories and Artivion 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 Abbott Laboratories and Artivion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbott Laboratories and Artivion, you can compare the effects of market volatilities on Abbott Laboratories and Artivion 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 Abbott Laboratories with a short position of Artivion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbott Laboratories and Artivion.
Diversification Opportunities for Abbott Laboratories and Artivion
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Abbott and Artivion is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Abbott Laboratories and Artivion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artivion and Abbott Laboratories 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 Abbott Laboratories are associated (or correlated) with Artivion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artivion has no effect on the direction of Abbott Laboratories i.e., Abbott Laboratories and Artivion go up and down completely randomly.
Pair Corralation between Abbott Laboratories and Artivion
Considering the 90-day investment horizon Abbott Laboratories is expected to generate 52.0 times less return on investment than Artivion. But when comparing it to its historical volatility, Abbott Laboratories is 2.72 times less risky than Artivion. It trades about 0.01 of its potential returns per unit of risk. Artivion is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,675 in Artivion on September 2, 2024 and sell it today you would earn a total of 277.00 from holding Artivion or generate 10.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbott Laboratories vs. Artivion
Performance |
| Timeline |
| Abbott Laboratories |
| Artivion |
Abbott Laboratories and Artivion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbott Laboratories and Artivion
The main advantage of trading using opposite Abbott Laboratories and Artivion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbott Laboratories position performs unexpectedly, Artivion 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 Artivion will offset losses from the drop in Artivion's long position.| Abbott Laboratories vs. AbbVie Inc | Abbott Laboratories vs. Eli Lilly and | Abbott Laboratories vs. Bristol Myers Squibb | Abbott Laboratories vs. Johnson Johnson |
| Artivion vs. Profound Medical Corp | Artivion vs. Si Bone | Artivion vs. Nevro Corp | Artivion vs. Orthopediatrics Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |