Correlation Between NYSE Composite and Anika Therapeutics
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Anika Therapeutics 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 NYSE Composite and Anika Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Anika Therapeutics, you can compare the effects of market volatilities on NYSE Composite and Anika Therapeutics 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 NYSE Composite with a short position of Anika Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Anika Therapeutics.
Diversification Opportunities for NYSE Composite and Anika Therapeutics
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Anika is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Anika Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anika Therapeutics and NYSE Composite 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 NYSE Composite are associated (or correlated) with Anika Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anika Therapeutics has no effect on the direction of NYSE Composite i.e., NYSE Composite and Anika Therapeutics go up and down completely randomly.
Pair Corralation between NYSE Composite and Anika Therapeutics
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.21 times more return on investment than Anika Therapeutics. However, NYSE Composite is 4.7 times less risky than Anika Therapeutics. It trades about 0.14 of its potential returns per unit of risk. Anika Therapeutics is currently generating about -0.08 per unit of risk. If you would invest 1,800,696 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 226,508 from holding NYSE Composite or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Anika Therapeutics
Performance |
| Timeline |
NYSE Composite and Anika Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Anika Therapeutics
Pair trading matchups for Anika Therapeutics
Pair Trading with NYSE Composite and Anika Therapeutics
The main advantage of trading using opposite NYSE Composite and Anika Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Anika Therapeutics 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 Anika Therapeutics will offset losses from the drop in Anika Therapeutics' long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Anika Therapeutics vs. Axogen Inc | Anika Therapeutics vs. Orthofix Medical | Anika Therapeutics vs. SurModics | Anika Therapeutics vs. Paragon 28 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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