Correlation Between Axonics Modulation and IRhythm Technologies
Can any of the company-specific risk be diversified away by investing in both Axonics Modulation and IRhythm Technologies 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 IRhythm Technologies 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 iRhythm Technologies, you can compare the effects of market volatilities on Axonics Modulation and IRhythm Technologies 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 IRhythm Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axonics Modulation and IRhythm Technologies.
Diversification Opportunities for Axonics Modulation and IRhythm Technologies
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axonics and IRhythm is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Axonics Modulation Technologie and iRhythm Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iRhythm Technologies 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 IRhythm Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iRhythm Technologies has no effect on the direction of Axonics Modulation i.e., Axonics Modulation and IRhythm Technologies go up and down completely randomly.
Pair Corralation between Axonics Modulation and IRhythm Technologies
Given the investment horizon of 90 days Axonics Modulation is expected to generate 8.06 times less return on investment than IRhythm Technologies. But when comparing it to its historical volatility, Axonics Modulation Technologies is 17.7 times less risky than IRhythm Technologies. It trades about 0.25 of its potential returns per unit of risk. iRhythm Technologies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,720 in iRhythm Technologies on September 6, 2024 and sell it today you would earn a total of 1,960 from holding iRhythm Technologies or generate 29.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 79.69% |
Values | Daily Returns |
Axonics Modulation Technologie vs. iRhythm Technologies
Performance |
Timeline |
Axonics Modulation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
iRhythm Technologies |
Axonics Modulation and IRhythm Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Axonics Modulation and IRhythm Technologies
The main advantage of trading using opposite Axonics Modulation and IRhythm Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axonics Modulation position performs unexpectedly, IRhythm Technologies 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 IRhythm Technologies will offset losses from the drop in IRhythm Technologies' long position.Axonics Modulation vs. Orthofix Medical | Axonics Modulation vs. Glaukos Corp | Axonics Modulation vs. Bruker | Axonics Modulation vs. Integer Holdings Corp |
IRhythm Technologies vs. Integer Holdings Corp | IRhythm Technologies vs. CONMED | IRhythm Technologies vs. LivaNova PLC | IRhythm Technologies vs. Orthopediatrics Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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