Correlation Between Anika Therapeutics and NuVasive
Can any of the company-specific risk be diversified away by investing in both Anika Therapeutics and NuVasive 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 NuVasive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anika Therapeutics and NuVasive, you can compare the effects of market volatilities on Anika Therapeutics and NuVasive 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 NuVasive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anika Therapeutics and NuVasive.
Diversification Opportunities for Anika Therapeutics and NuVasive
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anika and NuVasive is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Anika Therapeutics and NuVasive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuVasive 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 NuVasive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuVasive has no effect on the direction of Anika Therapeutics i.e., Anika Therapeutics and NuVasive go up and down completely randomly.
Pair Corralation between Anika Therapeutics and NuVasive
Given the investment horizon of 90 days Anika Therapeutics is expected to under-perform the NuVasive. In addition to that, Anika Therapeutics is 1.36 times more volatile than NuVasive. It trades about -0.03 of its total potential returns per unit of risk. NuVasive is currently generating about 0.0 per unit of volatility. If you would invest 4,279 in NuVasive on August 28, 2024 and sell it today you would lose (44.00) from holding NuVasive or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 28.78% |
| Values | Daily Returns |
Anika Therapeutics vs. NuVasive
Performance |
| Timeline |
| Anika Therapeutics |
| NuVasive |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Anika Therapeutics and NuVasive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anika Therapeutics and NuVasive
The main advantage of trading using opposite Anika Therapeutics and NuVasive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anika Therapeutics position performs unexpectedly, NuVasive 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 NuVasive will offset losses from the drop in NuVasive's long position.| Anika Therapeutics vs. Eliem Therapeutics | Anika Therapeutics vs. Scpharmaceuticals | Anika Therapeutics vs. Milestone Pharmaceuticals | Anika Therapeutics vs. Seres 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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