Correlation Between Baxter International and Clearpoint Neuro
Can any of the company-specific risk be diversified away by investing in both Baxter International and Clearpoint Neuro 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 Baxter International and Clearpoint Neuro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baxter International and Clearpoint Neuro, you can compare the effects of market volatilities on Baxter International and Clearpoint Neuro 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 Baxter International with a short position of Clearpoint Neuro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baxter International and Clearpoint Neuro.
Diversification Opportunities for Baxter International and Clearpoint Neuro
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Baxter and Clearpoint is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Baxter International and Clearpoint Neuro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearpoint Neuro and Baxter International 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 Baxter International are associated (or correlated) with Clearpoint Neuro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearpoint Neuro has no effect on the direction of Baxter International i.e., Baxter International and Clearpoint Neuro go up and down completely randomly.
Pair Corralation between Baxter International and Clearpoint Neuro
Considering the 90-day investment horizon Baxter International is expected to under-perform the Clearpoint Neuro. But the stock apears to be less risky and, when comparing its historical volatility, Baxter International is 2.17 times less risky than Clearpoint Neuro. The stock trades about -0.19 of its potential returns per unit of risk. The Clearpoint Neuro is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,274 in Clearpoint Neuro on September 4, 2024 and sell it today you would lose (74.00) from holding Clearpoint Neuro or give up 5.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baxter International vs. Clearpoint Neuro
Performance |
| Timeline |
| Baxter International |
| Clearpoint Neuro |
Baxter International and Clearpoint Neuro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baxter International and Clearpoint Neuro
The main advantage of trading using opposite Baxter International and Clearpoint Neuro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baxter International position performs unexpectedly, Clearpoint Neuro 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 Clearpoint Neuro will offset losses from the drop in Clearpoint Neuro's long position.| Baxter International vs. Embecta Corp | Baxter International vs. West Pharmaceutical Services | Baxter International vs. ResMed Inc | Baxter International vs. The Cooper Companies, |
| Clearpoint Neuro vs. Baxter International | Clearpoint Neuro vs. West Pharmaceutical Services | Clearpoint Neuro vs. ResMed Inc | Clearpoint Neuro vs. The Cooper Companies, |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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