Correlation Between STRATA Skin and Anika Therapeutics
Can any of the company-specific risk be diversified away by investing in both STRATA Skin 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 STRATA Skin and Anika Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRATA Skin Sciences and Anika Therapeutics, you can compare the effects of market volatilities on STRATA Skin 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 STRATA Skin with a short position of Anika Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRATA Skin and Anika Therapeutics.
Diversification Opportunities for STRATA Skin and Anika Therapeutics
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between STRATA and Anika is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding STRATA Skin Sciences and Anika Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anika Therapeutics and STRATA Skin 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 STRATA Skin Sciences 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 STRATA Skin i.e., STRATA Skin and Anika Therapeutics go up and down completely randomly.
Pair Corralation between STRATA Skin and Anika Therapeutics
Given the investment horizon of 90 days STRATA Skin Sciences is expected to generate 1.39 times more return on investment than Anika Therapeutics. However, STRATA Skin is 1.39 times more volatile than Anika Therapeutics. It trades about -0.02 of its potential returns per unit of risk. Anika Therapeutics is currently generating about -0.08 per unit of risk. If you would invest 370.00 in STRATA Skin Sciences on August 28, 2024 and sell it today you would lose (76.00) from holding STRATA Skin Sciences or give up 20.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRATA Skin Sciences vs. Anika Therapeutics
Performance |
| Timeline |
| STRATA Skin Sciences |
| Anika Therapeutics |
STRATA Skin and Anika Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRATA Skin and Anika Therapeutics
The main advantage of trading using opposite STRATA Skin and Anika Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRATA Skin 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.| STRATA Skin vs. Axogen Inc | STRATA Skin vs. Ainos Inc | STRATA Skin vs. LENSAR Inc | STRATA Skin vs. Nexalin Technology |
| Anika Therapeutics vs. Eliem Therapeutics | Anika Therapeutics vs. Scpharmaceuticals | Anika Therapeutics vs. Milestone Pharmaceuticals | Anika Therapeutics vs. Seres Therapeutics |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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