Correlation Between Catheter Precision and Varex Imaging

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Can any of the company-specific risk be diversified away by investing in both Catheter Precision and Varex Imaging 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 Catheter Precision and Varex Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catheter Precision and Varex Imaging Corp, you can compare the effects of market volatilities on Catheter Precision and Varex Imaging 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 Catheter Precision with a short position of Varex Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catheter Precision and Varex Imaging.

Diversification Opportunities for Catheter Precision and Varex Imaging

-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between Catheter and Varex is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Catheter Precision and Varex Imaging Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Varex Imaging Corp and Catheter Precision 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 Catheter Precision are associated (or correlated) with Varex Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Varex Imaging Corp has no effect on the direction of Catheter Precision i.e., Catheter Precision and Varex Imaging go up and down completely randomly.

Pair Corralation between Catheter Precision and Varex Imaging

Given the investment horizon of 90 days Catheter Precision is expected to under-perform the Varex Imaging. In addition to that, Catheter Precision is 3.67 times more volatile than Varex Imaging Corp. It trades about -0.08 of its total potential returns per unit of risk. Varex Imaging Corp is currently generating about -0.01 per unit of volatility. If you would invest  2,030  in Varex Imaging Corp on September 20, 2024 and sell it today you would lose (514.00) from holding Varex Imaging Corp or give up 25.32% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Catheter Precision  vs.  Varex Imaging Corp

 Performance 
       Timeline  
Catheter Precision 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Catheter Precision are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Catheter Precision disclosed solid returns over the last few months and may actually be approaching a breakup point.
Varex Imaging Corp 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Varex Imaging Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical and fundamental indicators, Varex Imaging showed solid returns over the last few months and may actually be approaching a breakup point.

Catheter Precision and Varex Imaging Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Catheter Precision and Varex Imaging

The main advantage of trading using opposite Catheter Precision and Varex Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catheter Precision position performs unexpectedly, Varex Imaging 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 Varex Imaging will offset losses from the drop in Varex Imaging's long position.
The idea behind Catheter Precision and Varex Imaging Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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