Correlation Between CONMED and AtriCure
Can any of the company-specific risk be diversified away by investing in both CONMED and AtriCure 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 CONMED and AtriCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONMED and AtriCure, you can compare the effects of market volatilities on CONMED and AtriCure 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 CONMED with a short position of AtriCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONMED and AtriCure.
Diversification Opportunities for CONMED and AtriCure
Modest diversification
The 3 months correlation between CONMED and AtriCure is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CONMED and AtriCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AtriCure and CONMED 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 CONMED are associated (or correlated) with AtriCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AtriCure has no effect on the direction of CONMED i.e., CONMED and AtriCure go up and down completely randomly.
Pair Corralation between CONMED and AtriCure
Given the investment horizon of 90 days CONMED is expected to under-perform the AtriCure. But the stock apears to be less risky and, when comparing its historical volatility, CONMED is 1.3 times less risky than AtriCure. The stock trades about -0.02 of its potential returns per unit of risk. The AtriCure is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,406 in AtriCure on August 28, 2024 and sell it today you would earn a total of 195.00 from holding AtriCure or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CONMED vs. AtriCure
Performance |
| Timeline |
| CONMED |
| AtriCure |
CONMED and AtriCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONMED and AtriCure
The main advantage of trading using opposite CONMED and AtriCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONMED position performs unexpectedly, AtriCure 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 AtriCure will offset losses from the drop in AtriCure's long position.The idea behind CONMED and AtriCure 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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