Correlation Between ALR Technologies and Anika Therapeutics
Can any of the company-specific risk be diversified away by investing in both ALR Technologies and Anika Therapeutics 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 ALR Technologies and Anika Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALR Technologies and Anika Therapeutics, you can compare the effects of market volatilities on ALR Technologies and Anika Therapeutics 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 ALR Technologies with a short position of Anika Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALR Technologies and Anika Therapeutics.
Diversification Opportunities for ALR Technologies and Anika Therapeutics
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ALR and Anika is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding ALR Technologies and Anika Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anika Therapeutics and ALR Technologies 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 ALR Technologies are associated (or correlated) with Anika Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anika Therapeutics has no effect on the direction of ALR Technologies i.e., ALR Technologies and Anika Therapeutics go up and down completely randomly.
Pair Corralation between ALR Technologies and Anika Therapeutics
Assuming the 90 days horizon ALR Technologies is expected to generate 6.62 times more return on investment than Anika Therapeutics. However, ALR Technologies is 6.62 times more volatile than Anika Therapeutics. It trades about 0.08 of its potential returns per unit of risk. Anika Therapeutics is currently generating about -0.08 per unit of risk. If you would invest 1.52 in ALR Technologies on September 3, 2024 and sell it today you would lose (0.57) from holding ALR Technologies or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALR Technologies vs. Anika Therapeutics
Performance |
| Timeline |
| ALR Technologies |
| Anika Therapeutics |
ALR Technologies and Anika Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALR Technologies and Anika Therapeutics
The main advantage of trading using opposite ALR Technologies and Anika Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALR Technologies position performs unexpectedly, Anika Therapeutics 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 Anika Therapeutics will offset losses from the drop in Anika Therapeutics' long position.| ALR Technologies vs. Artivion | ALR Technologies vs. Anika Therapeutics | ALR Technologies vs. Sight Sciences | ALR Technologies vs. Orthofix Medical |
| Anika Therapeutics vs. Axogen Inc | Anika Therapeutics vs. Orthofix Medical | Anika Therapeutics vs. SurModics | Anika Therapeutics vs. Paragon 28 |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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