Correlation Between CVRx and CONMED
Can any of the company-specific risk be diversified away by investing in both CVRx and CONMED 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 CONMED into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVRx Inc and CONMED, you can compare the effects of market volatilities on CVRx and CONMED 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 CONMED. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVRx and CONMED.
Diversification Opportunities for CVRx and CONMED
Modest diversification
The 3 months correlation between CVRx and CONMED is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CVRx Inc and CONMED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONMED 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 CONMED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONMED has no effect on the direction of CVRx i.e., CVRx and CONMED go up and down completely randomly.
Pair Corralation between CVRx and CONMED
Given the investment horizon of 90 days CVRx Inc is expected to generate 3.13 times more return on investment than CONMED. However, CVRx is 3.13 times more volatile than CONMED. It trades about 0.28 of its potential returns per unit of risk. CONMED is currently generating about 0.37 per unit of risk. If you would invest 1,029 in CVRx Inc on August 28, 2024 and sell it today you would earn a total of 524.00 from holding CVRx Inc or generate 50.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVRx Inc vs. CONMED
Performance |
| Timeline |
| CVRx Inc |
| CONMED |
CVRx and CONMED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVRx and CONMED
The main advantage of trading using opposite CVRx and CONMED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVRx position performs unexpectedly, CONMED 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 CONMED will offset losses from the drop in CONMED's long position.The idea behind CVRx Inc and CONMED 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.| CONMED vs. Heartbeam | CONMED vs. EUDA Health Holdings | CONMED vs. Nutex Health | CONMED 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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