Correlation Between Hologic and LeMaitre Vascular
Can any of the company-specific risk be diversified away by investing in both Hologic and LeMaitre Vascular 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 Hologic and LeMaitre Vascular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hologic and LeMaitre Vascular, you can compare the effects of market volatilities on Hologic and LeMaitre Vascular 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 Hologic with a short position of LeMaitre Vascular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hologic and LeMaitre Vascular.
Diversification Opportunities for Hologic and LeMaitre Vascular
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hologic and LeMaitre is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hologic and LeMaitre Vascular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LeMaitre Vascular and Hologic 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 Hologic are associated (or correlated) with LeMaitre Vascular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LeMaitre Vascular has no effect on the direction of Hologic i.e., Hologic and LeMaitre Vascular go up and down completely randomly.
Pair Corralation between Hologic and LeMaitre Vascular
Given the investment horizon of 90 days Hologic is expected to under-perform the LeMaitre Vascular. But the stock apears to be less risky and, when comparing its historical volatility, Hologic is 1.3 times less risky than LeMaitre Vascular. The stock trades about -0.02 of its potential returns per unit of risk. The LeMaitre Vascular is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 8,718 in LeMaitre Vascular on August 28, 2024 and sell it today you would earn a total of 1,991 from holding LeMaitre Vascular or generate 22.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hologic vs. LeMaitre Vascular
Performance |
| Timeline |
| Hologic |
| LeMaitre Vascular |
Hologic and LeMaitre Vascular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hologic and LeMaitre Vascular
The main advantage of trading using opposite Hologic and LeMaitre Vascular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hologic position performs unexpectedly, LeMaitre Vascular 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 LeMaitre Vascular will offset losses from the drop in LeMaitre Vascular's long position.The idea behind Hologic and LeMaitre Vascular 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.| LeMaitre Vascular vs. InfuSystems Holdings | LeMaitre Vascular vs. Pro Dex | LeMaitre Vascular vs. Utah Medical Products | LeMaitre Vascular vs. Milestone Scientific |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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