Correlation Between STRATA Skin and Cutera
Can any of the company-specific risk be diversified away by investing in both STRATA Skin and Cutera 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 Cutera 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 Cutera Inc, you can compare the effects of market volatilities on STRATA Skin and Cutera 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 Cutera. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRATA Skin and Cutera.
Diversification Opportunities for STRATA Skin and Cutera
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between STRATA and Cutera is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding STRATA Skin Sciences and Cutera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cutera Inc 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 Cutera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cutera Inc has no effect on the direction of STRATA Skin i.e., STRATA Skin and Cutera go up and down completely randomly.
Pair Corralation between STRATA Skin and Cutera
Given the investment horizon of 90 days STRATA Skin Sciences is expected to generate 0.63 times more return on investment than Cutera. However, STRATA Skin Sciences is 1.58 times less risky than Cutera. It trades about -0.02 of its potential returns per unit of risk. Cutera Inc is currently generating about -0.13 per unit of risk. If you would invest 396.00 in STRATA Skin Sciences on September 1, 2024 and sell it today you would lose (81.00) from holding STRATA Skin Sciences or give up 20.45% 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. Cutera Inc
Performance |
| Timeline |
| STRATA Skin Sciences |
| Cutera Inc |
STRATA Skin and Cutera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRATA Skin and Cutera
The main advantage of trading using opposite STRATA Skin and Cutera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRATA Skin position performs unexpectedly, Cutera 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 Cutera will offset losses from the drop in Cutera's long position.| STRATA Skin vs. Axogen Inc | STRATA Skin vs. Ainos Inc | STRATA Skin vs. LENSAR Inc | STRATA Skin vs. Nexalin Technology |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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