Correlation Between CVRx and Accelerate Diagnostics
Can any of the company-specific risk be diversified away by investing in both CVRx and Accelerate Diagnostics 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 Accelerate Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVRx Inc and Accelerate Diagnostics, you can compare the effects of market volatilities on CVRx and Accelerate Diagnostics 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 Accelerate Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVRx and Accelerate Diagnostics.
Diversification Opportunities for CVRx and Accelerate Diagnostics
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CVRx and Accelerate is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CVRx Inc and Accelerate Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate Diagnostics 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 Accelerate Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate Diagnostics has no effect on the direction of CVRx i.e., CVRx and Accelerate Diagnostics go up and down completely randomly.
Pair Corralation between CVRx and Accelerate Diagnostics
Given the investment horizon of 90 days CVRx Inc is expected to generate 2.31 times more return on investment than Accelerate Diagnostics. However, CVRx is 2.31 times more volatile than Accelerate Diagnostics. It trades about 0.26 of its potential returns per unit of risk. Accelerate Diagnostics is currently generating about -0.09 per unit of risk. If you would invest 1,011 in CVRx Inc on August 25, 2024 and sell it today you would earn a total of 474.00 from holding CVRx Inc or generate 46.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVRx Inc vs. Accelerate Diagnostics
Performance |
| Timeline |
| CVRx Inc |
| Accelerate Diagnostics |
CVRx and Accelerate Diagnostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVRx and Accelerate Diagnostics
The main advantage of trading using opposite CVRx and Accelerate Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVRx position performs unexpectedly, Accelerate Diagnostics 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 Accelerate Diagnostics will offset losses from the drop in Accelerate Diagnostics' long position.The idea behind CVRx Inc and Accelerate Diagnostics 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.| Accelerate Diagnostics vs. CVRx Inc | Accelerate Diagnostics vs. Neuropace | Accelerate Diagnostics vs. Anika Therapeutics | Accelerate Diagnostics vs. Axogen 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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