Correlation Between Anika Therapeutics and Principal Exchange
Can any of the company-specific risk be diversified away by investing in both Anika Therapeutics and Principal Exchange 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 Anika Therapeutics and Principal Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anika Therapeutics and Principal Exchange Traded Funds, you can compare the effects of market volatilities on Anika Therapeutics and Principal Exchange 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 Anika Therapeutics with a short position of Principal Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anika Therapeutics and Principal Exchange.
Diversification Opportunities for Anika Therapeutics and Principal Exchange
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anika and Principal is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Anika Therapeutics and Principal Exchange Traded Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Exchange and Anika Therapeutics 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 Anika Therapeutics are associated (or correlated) with Principal Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Exchange has no effect on the direction of Anika Therapeutics i.e., Anika Therapeutics and Principal Exchange go up and down completely randomly.
Pair Corralation between Anika Therapeutics and Principal Exchange
Given the investment horizon of 90 days Anika Therapeutics is expected to under-perform the Principal Exchange. In addition to that, Anika Therapeutics is 9.34 times more volatile than Principal Exchange Traded Funds. It trades about -0.07 of its total potential returns per unit of risk. Principal Exchange Traded Funds is currently generating about 0.12 per unit of volatility. If you would invest 1,983 in Principal Exchange Traded Funds on August 29, 2024 and sell it today you would earn a total of 106.00 from holding Principal Exchange Traded Funds or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anika Therapeutics vs. Principal Exchange Traded Fund
Performance |
| Timeline |
| Anika Therapeutics |
| Principal Exchange |
Anika Therapeutics and Principal Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anika Therapeutics and Principal Exchange
The main advantage of trading using opposite Anika Therapeutics and Principal Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anika Therapeutics position performs unexpectedly, Principal Exchange 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 Principal Exchange will offset losses from the drop in Principal Exchange's long position.| Anika Therapeutics vs. Axogen Inc | Anika Therapeutics vs. Orthofix Medical | Anika Therapeutics vs. SurModics | Anika Therapeutics vs. Paragon 28 |
| Principal Exchange vs. Senstar Technologies | Principal Exchange vs. ImmuCell | Principal Exchange vs. Anika Therapeutics |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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