Correlation Between CONMED and LivaNova PLC
Can any of the company-specific risk be diversified away by investing in both CONMED and LivaNova PLC 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 LivaNova PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONMED and LivaNova PLC, you can compare the effects of market volatilities on CONMED and LivaNova PLC 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 LivaNova PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONMED and LivaNova PLC.
Diversification Opportunities for CONMED and LivaNova PLC
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CONMED and LivaNova is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CONMED and LivaNova PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LivaNova PLC 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 LivaNova PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LivaNova PLC has no effect on the direction of CONMED i.e., CONMED and LivaNova PLC go up and down completely randomly.
Pair Corralation between CONMED and LivaNova PLC
Given the investment horizon of 90 days CONMED is expected to generate 1.22 times more return on investment than LivaNova PLC. However, CONMED is 1.22 times more volatile than LivaNova PLC. It trades about 0.37 of its potential returns per unit of risk. LivaNova PLC is currently generating about -0.05 per unit of risk. If you would invest 6,376 in CONMED on August 28, 2024 and sell it today you would earn a total of 1,378 from holding CONMED or generate 21.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CONMED vs. LivaNova PLC
Performance |
| Timeline |
| CONMED |
| LivaNova PLC |
CONMED and LivaNova PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONMED and LivaNova PLC
The main advantage of trading using opposite CONMED and LivaNova PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONMED position performs unexpectedly, LivaNova PLC 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 LivaNova PLC will offset losses from the drop in LivaNova PLC's long position.| CONMED vs. Heartbeam | CONMED vs. EUDA Health Holdings | CONMED vs. Nutex Health | CONMED vs. Healthcare Triangle |
| LivaNova PLC vs. Heartbeam | LivaNova PLC vs. EUDA Health Holdings | LivaNova PLC vs. Nutex Health | LivaNova PLC vs. Healthcare Triangle |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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