Correlation Between Anika Therapeutics and Neuropace
Can any of the company-specific risk be diversified away by investing in both Anika Therapeutics and Neuropace 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 Neuropace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anika Therapeutics and Neuropace, you can compare the effects of market volatilities on Anika Therapeutics and Neuropace 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 Neuropace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anika Therapeutics and Neuropace.
Diversification Opportunities for Anika Therapeutics and Neuropace
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Anika and Neuropace is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Anika Therapeutics and Neuropace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuropace 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 Neuropace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuropace has no effect on the direction of Anika Therapeutics i.e., Anika Therapeutics and Neuropace go up and down completely randomly.
Pair Corralation between Anika Therapeutics and Neuropace
Given the investment horizon of 90 days Anika Therapeutics is expected to under-perform the Neuropace. But the stock apears to be less risky and, when comparing its historical volatility, Anika Therapeutics is 1.48 times less risky than Neuropace. The stock trades about -0.08 of its potential returns per unit of risk. The Neuropace is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 696.00 in Neuropace on November 3, 2024 and sell it today you would earn a total of 680.00 from holding Neuropace or generate 97.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Anika Therapeutics vs. Neuropace
Performance |
| Timeline |
| Anika Therapeutics |
| Neuropace |
Anika Therapeutics and Neuropace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anika Therapeutics and Neuropace
The main advantage of trading using opposite Anika Therapeutics and Neuropace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anika Therapeutics position performs unexpectedly, Neuropace 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 Neuropace will offset losses from the drop in Neuropace's long position.| Anika Therapeutics vs. Axogen Inc | Anika Therapeutics vs. Orthofix Medical | Anika Therapeutics vs. SurModics | Anika Therapeutics vs. Paragon 28 |
| Neuropace vs. Electromed | Neuropace vs. Orthopediatrics Corp | Neuropace vs. SurModics | Neuropace 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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