Correlation Between CVRx and Anika Therapeutics
Can any of the company-specific risk be diversified away by investing in both CVRx and Anika Therapeutics 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 CVRx and Anika Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVRx Inc and Anika Therapeutics, you can compare the effects of market volatilities on CVRx and Anika Therapeutics 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 CVRx with a short position of Anika Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVRx and Anika Therapeutics.
Diversification Opportunities for CVRx and Anika Therapeutics
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CVRx and Anika is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CVRx Inc and Anika Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anika Therapeutics and CVRx 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 CVRx Inc are associated (or correlated) with Anika Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anika Therapeutics has no effect on the direction of CVRx i.e., CVRx and Anika Therapeutics go up and down completely randomly.
Pair Corralation between CVRx and Anika Therapeutics
Given the investment horizon of 90 days CVRx is expected to generate 1.95 times less return on investment than Anika Therapeutics. In addition to that, CVRx is 2.7 times more volatile than Anika Therapeutics. It trades about 0.06 of its total potential returns per unit of risk. Anika Therapeutics is currently generating about 0.33 per unit of volatility. If you would invest 1,594 in Anika Therapeutics on November 9, 2024 and sell it today you would earn a total of 185.00 from holding Anika Therapeutics or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVRx Inc vs. Anika Therapeutics
Performance |
| Timeline |
| CVRx Inc |
| Anika Therapeutics |
CVRx and Anika Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVRx and Anika Therapeutics
The main advantage of trading using opposite CVRx and Anika Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVRx position performs unexpectedly, Anika Therapeutics 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 Anika Therapeutics will offset losses from the drop in Anika Therapeutics' long position.The idea behind CVRx Inc and Anika Therapeutics 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.| Anika Therapeutics vs. Axogen Inc | Anika Therapeutics vs. Orthofix Medical | Anika Therapeutics vs. SurModics | Anika Therapeutics vs. Paragon 28 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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