Correlation Between AtriCure and Ansell

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

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

Diversification Opportunities for AtriCure and Ansell

0.66

Correlation Coefficient

AtriCure  Ansell

Poor diversification

The 3 months correlation between AtriCure and Ansell is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding AtriCure and Ansell Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ansell Ltd ADR and AtriCure 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 AtriCure are associated (or correlated) with Ansell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ansell Ltd ADR has no effect on the direction of AtriCure i.e., AtriCure and Ansell go up and down completely randomly.

Pair Corralation between AtriCure and Ansell

If you would invest  7,761  in Ansell Ltd ADR on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Ansell Ltd ADR or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.28%
Values	Daily Returns

AtriCure  vs.  Ansell Ltd ADR

AtriCure

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AtriCure are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, AtriCure exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ansell Ltd ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ansell Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Ansell is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AtriCure and Ansell

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

The idea behind AtriCure and Ansell Ltd ADR 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.