Correlation Between Cutera and Accuray Incorporated
Can any of the company-specific risk be diversified away by investing in both Cutera and Accuray Incorporated 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 Cutera and Accuray Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cutera Inc and Accuray Incorporated, you can compare the effects of market volatilities on Cutera and Accuray Incorporated 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 Cutera with a short position of Accuray Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cutera and Accuray Incorporated.
Diversification Opportunities for Cutera and Accuray Incorporated
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cutera and Accuray is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cutera Inc and Accuray Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accuray Incorporated and Cutera 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 Cutera Inc are associated (or correlated) with Accuray Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accuray Incorporated has no effect on the direction of Cutera i.e., Cutera and Accuray Incorporated go up and down completely randomly.
Pair Corralation between Cutera and Accuray Incorporated
Given the investment horizon of 90 days Cutera Inc is expected to generate 2.88 times more return on investment than Accuray Incorporated. However, Cutera is 2.88 times more volatile than Accuray Incorporated. It trades about 0.23 of its potential returns per unit of risk. Accuray Incorporated is currently generating about 0.26 per unit of risk. If you would invest 33.00 in Cutera Inc on October 22, 2024 and sell it today you would earn a total of 15.00 from holding Cutera Inc or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cutera Inc vs. Accuray Incorporated
Performance |
| Timeline |
| Cutera Inc |
| Accuray Incorporated |
Cutera and Accuray Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cutera and Accuray Incorporated
The main advantage of trading using opposite Cutera and Accuray Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cutera position performs unexpectedly, Accuray Incorporated 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 Accuray Incorporated will offset losses from the drop in Accuray Incorporated's long position.The idea behind Cutera Inc and Accuray Incorporated 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.| Accuray Incorporated vs. SurModics | Accuray Incorporated vs. Axogen Inc | Accuray Incorporated vs. Bioventus | Accuray Incorporated vs. Cutera Inc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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