Correlation Between Warby Parker and AtriCure
Can any of the company-specific risk be diversified away by investing in both Warby Parker and AtriCure 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 Warby Parker and AtriCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warby Parker and AtriCure, you can compare the effects of market volatilities on Warby Parker and AtriCure 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 Warby Parker with a short position of AtriCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warby Parker and AtriCure.
Diversification Opportunities for Warby Parker and AtriCure
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Warby and AtriCure is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Warby Parker and AtriCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AtriCure and Warby Parker 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 Warby Parker are associated (or correlated) with AtriCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AtriCure has no effect on the direction of Warby Parker i.e., Warby Parker and AtriCure go up and down completely randomly.
Pair Corralation between Warby Parker and AtriCure
Given the investment horizon of 90 days Warby Parker is expected to generate 0.46 times more return on investment than AtriCure. However, Warby Parker is 2.19 times less risky than AtriCure. It trades about 0.6 of its potential returns per unit of risk. AtriCure is currently generating about 0.22 per unit of risk. If you would invest 1,743 in Warby Parker on August 24, 2024 and sell it today you would earn a total of 584.00 from holding Warby Parker or generate 33.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Warby Parker vs. AtriCure
Performance |
| Timeline |
| Warby Parker |
| AtriCure |
Warby Parker and AtriCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warby Parker and AtriCure
The main advantage of trading using opposite Warby Parker and AtriCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warby Parker position performs unexpectedly, AtriCure 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 AtriCure will offset losses from the drop in AtriCure's long position.| Warby Parker vs. Alcon AG | Warby Parker vs. The Cooper Companies, | Warby Parker vs. AngioDynamics | Warby Parker vs. AptarGroup |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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