Correlation Between Clearpoint Neuro and Pulmonx Corp

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

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

Diversification Opportunities for Clearpoint Neuro and Pulmonx Corp

-0.23

Correlation Coefficient

Clearpoint Neuro  Pulmonx Corp

Very good diversification

The 3 months correlation between Clearpoint and Pulmonx is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Clearpoint Neuro and Pulmonx Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulmonx Corp and Clearpoint Neuro 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 Clearpoint Neuro are associated (or correlated) with Pulmonx Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulmonx Corp has no effect on the direction of Clearpoint Neuro i.e., Clearpoint Neuro and Pulmonx Corp go up and down completely randomly.

Pair Corralation between Clearpoint Neuro and Pulmonx Corp

Given the investment horizon of 90 days Clearpoint Neuro is expected to generate 1.22 times more return on investment than Pulmonx Corp. However, Clearpoint Neuro is 1.22 times more volatile than Pulmonx Corp. It trades about 0.1 of its potential returns per unit of risk. Pulmonx Corp is currently generating about -0.04 per unit of risk. If you would invest  655.00  in Clearpoint Neuro on September 13, 2024 and sell it today you would earn a total of  988.00  from holding Clearpoint Neuro or generate 150.84% return on investment over 90 days.

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

Clearpoint Neuro  vs.  Pulmonx Corp

Clearpoint Neuro

Risk-Adjusted Performance

9 of 100

OK

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

Pulmonx Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pulmonx Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Clearpoint Neuro and Pulmonx Corp

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

The idea behind Clearpoint Neuro and Pulmonx Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.