Correlation Between AtriCure and ATRION
Can any of the company-specific risk be diversified away by investing in both AtriCure and ATRION 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 AtriCure and ATRION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AtriCure and ATRION, you can compare the effects of market volatilities on AtriCure and ATRION 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 AtriCure with a short position of ATRION. Check out your portfolio center. Please also check ongoing floating volatility patterns of AtriCure and ATRION.
Diversification Opportunities for AtriCure and ATRION
Modest diversification
The 3 months correlation between AtriCure and ATRION is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding AtriCure and ATRION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRION and AtriCure 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 AtriCure are associated (or correlated) with ATRION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRION has no effect on the direction of AtriCure i.e., AtriCure and ATRION go up and down completely randomly.
Pair Corralation between AtriCure and ATRION
Given the investment horizon of 90 days AtriCure is expected to generate 0.35 times more return on investment than ATRION. However, AtriCure is 2.82 times less risky than ATRION. It trades about 0.02 of its potential returns per unit of risk. ATRION is currently generating about -0.06 per unit of risk. If you would invest 3,497 in AtriCure on August 27, 2024 and sell it today you would earn a total of 77.00 from holding AtriCure or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 64.36% |
| Values | Daily Returns |
AtriCure vs. ATRION
Performance |
| Timeline |
| AtriCure |
| ATRION |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AtriCure and ATRION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AtriCure and ATRION
The main advantage of trading using opposite AtriCure and ATRION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AtriCure position performs unexpectedly, ATRION 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 ATRION will offset losses from the drop in ATRION's long position.The idea behind AtriCure and ATRION 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 Directory module to find actively traded commodities issued by global exchanges.
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