Correlation Between Anika Therapeutics and Tenon Medical
Can any of the company-specific risk be diversified away by investing in both Anika Therapeutics and Tenon Medical 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 Tenon Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anika Therapeutics and Tenon Medical, you can compare the effects of market volatilities on Anika Therapeutics and Tenon Medical 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 Tenon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anika Therapeutics and Tenon Medical.
Diversification Opportunities for Anika Therapeutics and Tenon Medical
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anika and Tenon is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Anika Therapeutics and Tenon Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenon Medical 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 Tenon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenon Medical has no effect on the direction of Anika Therapeutics i.e., Anika Therapeutics and Tenon Medical go up and down completely randomly.
Pair Corralation between Anika Therapeutics and Tenon Medical
Given the investment horizon of 90 days Anika Therapeutics is expected to under-perform the Tenon Medical. But the stock apears to be less risky and, when comparing its historical volatility, Anika Therapeutics is 3.38 times less risky than Tenon Medical. The stock trades about -0.08 of its potential returns per unit of risk. The Tenon Medical is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 561.00 in Tenon Medical on August 28, 2024 and sell it today you would lose (309.00) from holding Tenon Medical or give up 55.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anika Therapeutics vs. Tenon Medical
Performance |
| Timeline |
| Anika Therapeutics |
| Tenon Medical |
Anika Therapeutics and Tenon Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anika Therapeutics and Tenon Medical
The main advantage of trading using opposite Anika Therapeutics and Tenon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anika Therapeutics position performs unexpectedly, Tenon Medical 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 Tenon Medical will offset losses from the drop in Tenon Medical's long position.| Anika Therapeutics vs. Eliem Therapeutics | Anika Therapeutics vs. Scpharmaceuticals | Anika Therapeutics vs. Milestone Pharmaceuticals | Anika Therapeutics vs. Seres Therapeutics |
| Tenon Medical vs. Ainos Inc | Tenon Medical vs. STRATA Skin Sciences | Tenon Medical vs. Neuropace | Tenon Medical vs. Movano Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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