Correlation Between EXACT Sciences and CVRx
Can any of the company-specific risk be diversified away by investing in both EXACT Sciences and CVRx 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 EXACT Sciences and CVRx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EXACT Sciences and CVRx Inc, you can compare the effects of market volatilities on EXACT Sciences and CVRx 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 EXACT Sciences with a short position of CVRx. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXACT Sciences and CVRx.
Diversification Opportunities for EXACT Sciences and CVRx
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EXACT and CVRx is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding EXACT Sciences and CVRx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVRx Inc and EXACT Sciences 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 EXACT Sciences are associated (or correlated) with CVRx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVRx Inc has no effect on the direction of EXACT Sciences i.e., EXACT Sciences and CVRx go up and down completely randomly.
Pair Corralation between EXACT Sciences and CVRx
Given the investment horizon of 90 days EXACT Sciences is expected to under-perform the CVRx. But the stock apears to be less risky and, when comparing its historical volatility, EXACT Sciences is 1.71 times less risky than CVRx. The stock trades about -0.01 of its potential returns per unit of risk. The CVRx Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,482 in CVRx Inc on August 31, 2024 and sell it today you would earn a total of 50.00 from holding CVRx Inc or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EXACT Sciences vs. CVRx Inc
Performance |
| Timeline |
| EXACT Sciences |
| CVRx Inc |
EXACT Sciences and CVRx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EXACT Sciences and CVRx
The main advantage of trading using opposite EXACT Sciences and CVRx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXACT Sciences position performs unexpectedly, CVRx 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 CVRx will offset losses from the drop in CVRx's long position.| EXACT Sciences vs. Natera Inc | EXACT Sciences vs. Caredx Inc | EXACT Sciences vs. Illumina | EXACT Sciences vs. Twist Bioscience Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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