Correlation Between Tactile Systems and Crescita Therapeutics
Can any of the company-specific risk be diversified away by investing in both Tactile Systems and Crescita 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 Tactile Systems and Crescita Therapeutics 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 Crescita Therapeutics, you can compare the effects of market volatilities on Tactile Systems and Crescita 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 Tactile Systems with a short position of Crescita Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tactile Systems and Crescita Therapeutics.
Diversification Opportunities for Tactile Systems and Crescita Therapeutics
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tactile and Crescita is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Tactile Systems Technology and Crescita Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescita Therapeutics 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 Crescita Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescita Therapeutics has no effect on the direction of Tactile Systems i.e., Tactile Systems and Crescita Therapeutics go up and down completely randomly.
Pair Corralation between Tactile Systems and Crescita Therapeutics
Given the investment horizon of 90 days Tactile Systems is expected to generate 43.31 times less return on investment than Crescita Therapeutics. But when comparing it to its historical volatility, Tactile Systems Technology is 29.93 times less risky than Crescita Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Crescita Therapeutics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Crescita Therapeutics on September 3, 2024 and sell it today you would earn a total of 13.00 from holding Crescita Therapeutics or generate 40.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Tactile Systems Technology vs. Crescita Therapeutics
Performance |
| Timeline |
| Tactile Systems Tech |
| Crescita Therapeutics |
Tactile Systems and Crescita Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tactile Systems and Crescita Therapeutics
The main advantage of trading using opposite Tactile Systems and Crescita Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tactile Systems position performs unexpectedly, Crescita 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 Crescita Therapeutics will offset losses from the drop in Crescita Therapeutics' long position.| Tactile Systems vs. CONMED | Tactile Systems vs. Treace Medical Concepts | Tactile Systems vs. SurModics | Tactile Systems vs. LivaNova PLC |
| Crescita Therapeutics vs. Pmv Pharmaceuticals | Crescita Therapeutics vs. MediciNova | Crescita Therapeutics vs. Pharvaris BV | Crescita Therapeutics vs. PepGen |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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