Correlation Between AtriCure and Stereotaxis

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

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

Diversification Opportunities for AtriCure and Stereotaxis

-0.04

Correlation Coefficient

AtriCure  Stereotaxis

Good diversification

The 3 months correlation between AtriCure and Stereotaxis is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding AtriCure and Stereotaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stereotaxis 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 Stereotaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stereotaxis has no effect on the direction of AtriCure i.e., AtriCure and Stereotaxis go up and down completely randomly.

Pair Corralation between AtriCure and Stereotaxis

Given the investment horizon of 90 days AtriCure is expected to generate 0.73 times more return on investment than Stereotaxis. However, AtriCure is 1.37 times less risky than Stereotaxis. It trades about 0.18 of its potential returns per unit of risk. Stereotaxis is currently generating about 0.04 per unit of risk. If you would invest  2,594  in AtriCure on September 2, 2024 and sell it today you would earn a total of  1,022  from holding AtriCure or generate 39.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AtriCure  vs.  Stereotaxis

AtriCure

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AtriCure are ranked lower than 14 (%) 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.

Stereotaxis

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stereotaxis are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Stereotaxis may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with AtriCure and Stereotaxis

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

The idea behind AtriCure and Stereotaxis 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.