Correlation Between Establishment Labs and Axogen
Can any of the company-specific risk be diversified away by investing in both Establishment Labs and Axogen 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 Establishment Labs and Axogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Establishment Labs Holdings and Axogen Inc, you can compare the effects of market volatilities on Establishment Labs and Axogen 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 Establishment Labs with a short position of Axogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Establishment Labs and Axogen.
Diversification Opportunities for Establishment Labs and Axogen
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Establishment and Axogen is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Establishment Labs Holdings and Axogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axogen Inc and Establishment Labs 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 Establishment Labs Holdings are associated (or correlated) with Axogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axogen Inc has no effect on the direction of Establishment Labs i.e., Establishment Labs and Axogen go up and down completely randomly.
Pair Corralation between Establishment Labs and Axogen
Given the investment horizon of 90 days Establishment Labs Holdings is expected to under-perform the Axogen. In addition to that, Establishment Labs is 1.47 times more volatile than Axogen Inc. It trades about -0.26 of its total potential returns per unit of risk. Axogen Inc is currently generating about 0.26 per unit of volatility. If you would invest 1,456 in Axogen Inc on November 7, 2024 and sell it today you would earn a total of 352.00 from holding Axogen Inc or generate 24.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Establishment Labs Holdings vs. Axogen Inc
Performance |
| Timeline |
| Establishment Labs |
| Axogen Inc |
Establishment Labs and Axogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Establishment Labs and Axogen
The main advantage of trading using opposite Establishment Labs and Axogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Establishment Labs position performs unexpectedly, Axogen 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 Axogen will offset losses from the drop in Axogen's long position.| Establishment Labs vs. Orthopediatrics Corp | Establishment Labs vs. Integer Holdings Corp | Establishment Labs vs. Treace Medical Concepts | Establishment Labs vs. CONMED |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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