Correlation Between EDAP TMS and AngioDynamics
Can any of the company-specific risk be diversified away by investing in both EDAP TMS and AngioDynamics 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 EDAP TMS and AngioDynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EDAP TMS SA and AngioDynamics, you can compare the effects of market volatilities on EDAP TMS and AngioDynamics 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 EDAP TMS with a short position of AngioDynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDAP TMS and AngioDynamics.
Diversification Opportunities for EDAP TMS and AngioDynamics
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EDAP and AngioDynamics is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding EDAP TMS SA and AngioDynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngioDynamics and EDAP TMS 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 EDAP TMS SA are associated (or correlated) with AngioDynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngioDynamics has no effect on the direction of EDAP TMS i.e., EDAP TMS and AngioDynamics go up and down completely randomly.
Pair Corralation between EDAP TMS and AngioDynamics
Given the investment horizon of 90 days EDAP TMS SA is expected to under-perform the AngioDynamics. But the stock apears to be less risky and, when comparing its historical volatility, EDAP TMS SA is 1.18 times less risky than AngioDynamics. The stock trades about -0.25 of its potential returns per unit of risk. The AngioDynamics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 929.00 in AngioDynamics on December 30, 2024 and sell it today you would earn a total of 21.00 from holding AngioDynamics or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EDAP TMS SA vs. AngioDynamics
Performance |
| Timeline |
| EDAP TMS SA |
| AngioDynamics |
EDAP TMS and AngioDynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EDAP TMS and AngioDynamics
The main advantage of trading using opposite EDAP TMS and AngioDynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EDAP TMS position performs unexpectedly, AngioDynamics 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 AngioDynamics will offset losses from the drop in AngioDynamics' long position.| EDAP TMS vs. Patterson Companies | ||
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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