Correlation Between Apyx Medical and Cerus
Can any of the company-specific risk be diversified away by investing in both Apyx Medical and Cerus 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 Apyx Medical and Cerus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apyx Medical and Cerus, you can compare the effects of market volatilities on Apyx Medical and Cerus 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 Apyx Medical with a short position of Cerus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apyx Medical and Cerus.
Diversification Opportunities for Apyx Medical and Cerus
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apyx and Cerus is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Apyx Medical and Cerus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cerus and Apyx Medical 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 Apyx Medical are associated (or correlated) with Cerus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cerus has no effect on the direction of Apyx Medical i.e., Apyx Medical and Cerus go up and down completely randomly.
Pair Corralation between Apyx Medical and Cerus
Given the investment horizon of 90 days Apyx Medical is expected to generate 1.97 times more return on investment than Cerus. However, Apyx Medical is 1.97 times more volatile than Cerus. It trades about 0.11 of its potential returns per unit of risk. Cerus is currently generating about -0.04 per unit of risk. If you would invest 140.00 in Apyx Medical on September 21, 2024 and sell it today you would earn a total of 18.00 from holding Apyx Medical or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apyx Medical vs. Cerus
Performance |
| Timeline |
| Apyx Medical |
| Cerus |
Apyx Medical and Cerus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apyx Medical and Cerus
The main advantage of trading using opposite Apyx Medical and Cerus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apyx Medical position performs unexpectedly, Cerus 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 Cerus will offset losses from the drop in Cerus' long position.The idea behind Apyx Medical and Cerus pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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