Correlation Between Artivion and LivaNova PLC

Can any of the company-specific risk be diversified away by investing in both Artivion and LivaNova PLC 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 Artivion and LivaNova PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Artivion and LivaNova PLC, you can compare the effects of market volatilities on Artivion and LivaNova PLC 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 Artivion with a short position of LivaNova PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artivion and LivaNova PLC.

Diversification Opportunities for Artivion and LivaNova PLC

0.93

Correlation Coefficient

Artivion  LivaNova PLC

Almost no diversification

The 3 months correlation between Artivion and LivaNova is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Artivion and LivaNova PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LivaNova PLC and Artivion 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 Artivion are associated (or correlated) with LivaNova PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LivaNova PLC has no effect on the direction of Artivion i.e., Artivion and LivaNova PLC go up and down completely randomly.

Pair Corralation between Artivion and LivaNova PLC

Given the investment horizon of 90 days Artivion is expected to generate 0.7 times more return on investment than LivaNova PLC. However, Artivion is 1.43 times less risky than LivaNova PLC. It trades about -0.11 of its potential returns per unit of risk. LivaNova PLC is currently generating about -0.09 per unit of risk. If you would invest  2,828  in Artivion on December 23, 2024 and sell it today you would lose (385.00) from holding Artivion or give up 13.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Artivion  vs.  LivaNova PLC

Artivion

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artivion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

LivaNova PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days LivaNova PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Artivion and LivaNova PLC

The main advantage of trading using opposite Artivion and LivaNova PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artivion position performs unexpectedly, LivaNova PLC 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 LivaNova PLC will offset losses from the drop in LivaNova PLC's long position.

The idea behind Artivion and LivaNova PLC 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 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.