Correlation Between Axogen and Cutera
Can any of the company-specific risk be diversified away by investing in both Axogen and Cutera 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 Axogen and Cutera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axogen Inc and Cutera Inc, you can compare the effects of market volatilities on Axogen and Cutera 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 Axogen with a short position of Cutera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axogen and Cutera.
Diversification Opportunities for Axogen and Cutera
Modest diversification
The 3 months correlation between Axogen and Cutera is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Axogen Inc and Cutera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cutera Inc and Axogen 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 Axogen Inc are associated (or correlated) with Cutera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cutera Inc has no effect on the direction of Axogen i.e., Axogen and Cutera go up and down completely randomly.
Pair Corralation between Axogen and Cutera
Given the investment horizon of 90 days Axogen Inc is expected to generate 0.67 times more return on investment than Cutera. However, Axogen Inc is 1.49 times less risky than Cutera. It trades about -0.01 of its potential returns per unit of risk. Cutera Inc is currently generating about -0.44 per unit of risk. If you would invest 1,394 in Axogen Inc on August 28, 2024 and sell it today you would lose (47.00) from holding Axogen Inc or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axogen Inc vs. Cutera Inc
Performance |
| Timeline |
| Axogen Inc |
| Cutera Inc |
Axogen and Cutera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axogen and Cutera
The main advantage of trading using opposite Axogen and Cutera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axogen position performs unexpectedly, Cutera 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 Cutera will offset losses from the drop in Cutera's long position.The idea behind Axogen Inc and Cutera Inc 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |