Correlation Between Tactile Systems and Axim Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Tactile Systems and Axim Biotechnologies 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 Tactile Systems and Axim Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tactile Systems Technology and Axim Biotechnologies, you can compare the effects of market volatilities on Tactile Systems and Axim Biotechnologies 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 Tactile Systems with a short position of Axim Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tactile Systems and Axim Biotechnologies.
Diversification Opportunities for Tactile Systems and Axim Biotechnologies
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tactile and Axim is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Tactile Systems Technology and Axim Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axim Biotechnologies and Tactile Systems 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 Tactile Systems Technology are associated (or correlated) with Axim Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axim Biotechnologies has no effect on the direction of Tactile Systems i.e., Tactile Systems and Axim Biotechnologies go up and down completely randomly.
Pair Corralation between Tactile Systems and Axim Biotechnologies
Given the investment horizon of 90 days Tactile Systems is expected to generate 10.41 times less return on investment than Axim Biotechnologies. But when comparing it to its historical volatility, Tactile Systems Technology is 4.44 times less risky than Axim Biotechnologies. It trades about 0.01 of its potential returns per unit of risk. Axim Biotechnologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2.40 in Axim Biotechnologies on December 1, 2024 and sell it today you would lose (2.10) from holding Axim Biotechnologies or give up 87.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tactile Systems Technology vs. Axim Biotechnologies
Performance |
| Timeline |
| Tactile Systems Tech |
| Axim Biotechnologies |
Tactile Systems and Axim Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tactile Systems and Axim Biotechnologies
The main advantage of trading using opposite Tactile Systems and Axim Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tactile Systems position performs unexpectedly, Axim Biotechnologies 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 Axim Biotechnologies will offset losses from the drop in Axim Biotechnologies' long position.| Tactile Systems vs. CONMED | Tactile Systems vs. Treace Medical Concepts | Tactile Systems vs. SurModics | Tactile Systems vs. LivaNova PLC |
| Axim Biotechnologies vs. Cellectis SA | Axim Biotechnologies vs. Biotron Limited | Axim Biotechnologies vs. Regenicin | Axim Biotechnologies vs. biOasis Technologies |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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