Correlation Between Axonics Modulation and Caredx

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Axonics Modulation and Caredx 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 Axonics Modulation and Caredx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axonics Modulation Technologies and Caredx Inc, you can compare the effects of market volatilities on Axonics Modulation and Caredx 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 Axonics Modulation with a short position of Caredx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axonics Modulation and Caredx.

Diversification Opportunities for Axonics Modulation and Caredx

-0.8
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Axonics and Caredx is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Axonics Modulation Technologie and Caredx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caredx Inc and Axonics Modulation 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 Axonics Modulation Technologies are associated (or correlated) with Caredx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caredx Inc has no effect on the direction of Axonics Modulation i.e., Axonics Modulation and Caredx go up and down completely randomly.

Pair Corralation between Axonics Modulation and Caredx

Given the investment horizon of 90 days Axonics Modulation is expected to generate 9.78 times less return on investment than Caredx. But when comparing it to its historical volatility, Axonics Modulation Technologies is 18.74 times less risky than Caredx. It trades about 0.22 of its potential returns per unit of risk. Caredx Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,489  in Caredx Inc on September 9, 2024 and sell it today you would earn a total of  1,015  from holding Caredx Inc or generate 68.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy88.1%
ValuesDaily Returns

Axonics Modulation Technologie  vs.  Caredx Inc

 Performance 
       Timeline  
Axonics Modulation 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Solid
Over the last 90 days Axonics Modulation Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Axonics Modulation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Caredx Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Caredx Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Caredx is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Axonics Modulation and Caredx Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Axonics Modulation and Caredx

The main advantage of trading using opposite Axonics Modulation and Caredx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axonics Modulation position performs unexpectedly, Caredx 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 Caredx will offset losses from the drop in Caredx's long position.
The idea behind Axonics Modulation Technologies and Caredx Inc 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

Other Complementary Tools

Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Equity Valuation
Check real value of public entities based on technical and fundamental data
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes