Correlation Between Artivion and Tactile Systems

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

By analyzing existing cross correlation between Artivion and Tactile Systems Technology, you can compare the effects of market volatilities on Artivion and Tactile Systems 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 Tactile Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artivion and Tactile Systems.

Diversification Opportunities for Artivion and Tactile Systems

0.94

Correlation Coefficient

Artivion  Tactile Systems

Almost no diversification

The 3 months correlation between Artivion and Tactile is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Artivion and Tactile Systems Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tactile Systems Tech 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 Tactile Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tactile Systems Tech has no effect on the direction of Artivion i.e., Artivion and Tactile Systems go up and down completely randomly.

Pair Corralation between Artivion and Tactile Systems

Given the investment horizon of 90 days Artivion is expected to generate 0.85 times more return on investment than Tactile Systems. However, Artivion is 1.18 times less risky than Tactile Systems. It trades about -0.13 of its potential returns per unit of risk. Tactile Systems Technology is currently generating about -0.19 per unit of risk. If you would invest  2,859  in Artivion on December 30, 2024 and sell it today you would lose (434.00) from holding Artivion or give up 15.18% 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.  Tactile Systems Technology

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.

Tactile Systems Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tactile Systems Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Artivion and Tactile Systems

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

The idea behind Artivion and Tactile Systems Technology 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.