Correlation Between Avita Medical and OraSure Technologies
Can any of the company-specific risk be diversified away by investing in both Avita Medical and OraSure Technologies 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 Avita Medical and OraSure Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avita Medical and OraSure Technologies, you can compare the effects of market volatilities on Avita Medical and OraSure Technologies 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 Avita Medical with a short position of OraSure Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avita Medical and OraSure Technologies.
Diversification Opportunities for Avita Medical and OraSure Technologies
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Avita and OraSure is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Avita Medical and OraSure Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OraSure Technologies and Avita Medical 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 Avita Medical are associated (or correlated) with OraSure Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OraSure Technologies has no effect on the direction of Avita Medical i.e., Avita Medical and OraSure Technologies go up and down completely randomly.
Pair Corralation between Avita Medical and OraSure Technologies
Given the investment horizon of 90 days Avita Medical is expected to under-perform the OraSure Technologies. In addition to that, Avita Medical is 1.19 times more volatile than OraSure Technologies. It trades about -0.12 of its total potential returns per unit of risk. OraSure Technologies is currently generating about -0.07 per unit of volatility. If you would invest 381.00 in OraSure Technologies on September 21, 2024 and sell it today you would lose (18.00) from holding OraSure Technologies or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avita Medical vs. OraSure Technologies
Performance |
| Timeline |
| Avita Medical |
| OraSure Technologies |
Avita Medical and OraSure Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avita Medical and OraSure Technologies
The main advantage of trading using opposite Avita Medical and OraSure Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avita Medical position performs unexpectedly, OraSure Technologies 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 OraSure Technologies will offset losses from the drop in OraSure Technologies' long position.| Avita Medical vs. Clearpoint Neuro | Avita Medical vs. Sight Sciences | Avita Medical vs. Treace Medical Concepts | Avita Medical vs. Rxsight |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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