Correlation Between AtriCure and BioLife Solutions
Can any of the company-specific risk be diversified away by investing in both AtriCure and BioLife Solutions 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 BioLife Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AtriCure and BioLife Solutions, you can compare the effects of market volatilities on AtriCure and BioLife Solutions 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 BioLife Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of AtriCure and BioLife Solutions.
Diversification Opportunities for AtriCure and BioLife Solutions
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AtriCure and BioLife is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding AtriCure and BioLife Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioLife Solutions 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 BioLife Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioLife Solutions has no effect on the direction of AtriCure i.e., AtriCure and BioLife Solutions go up and down completely randomly.
Pair Corralation between AtriCure and BioLife Solutions
Given the investment horizon of 90 days AtriCure is expected to generate 0.52 times more return on investment than BioLife Solutions. However, AtriCure is 1.93 times less risky than BioLife Solutions. It trades about 0.2 of its potential returns per unit of risk. BioLife Solutions is currently generating about 0.09 per unit of risk. If you would invest 3,366 in AtriCure on September 4, 2024 and sell it today you would earn a total of 340.00 from holding AtriCure or generate 10.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AtriCure vs. BioLife Solutions
Performance |
| Timeline |
| AtriCure |
| BioLife Solutions |
AtriCure and BioLife Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AtriCure and BioLife Solutions
The main advantage of trading using opposite AtriCure and BioLife Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AtriCure position performs unexpectedly, BioLife Solutions 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 BioLife Solutions will offset losses from the drop in BioLife Solutions' long position.The idea behind AtriCure and BioLife Solutions 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.| BioLife Solutions vs. Akoya Biosciences | BioLife Solutions vs. AtriCure | BioLife Solutions vs. ICU Medical | BioLife Solutions vs. Haemonetics |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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