Correlation Between Cytek Biosciences and Orthopediatrics Corp

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

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

Diversification Opportunities for Cytek Biosciences and Orthopediatrics Corp

-0.35

Correlation Coefficient

Cytek Biosciences  Orthopediatrics Corp

Very good diversification

The 3 months correlation between Cytek and Orthopediatrics is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cytek Biosciences and Orthopediatrics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orthopediatrics Corp and Cytek Biosciences 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 Cytek Biosciences are associated (or correlated) with Orthopediatrics Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orthopediatrics Corp has no effect on the direction of Cytek Biosciences i.e., Cytek Biosciences and Orthopediatrics Corp go up and down completely randomly.

Pair Corralation between Cytek Biosciences and Orthopediatrics Corp

Given the investment horizon of 90 days Cytek Biosciences is expected to generate 14.45 times less return on investment than Orthopediatrics Corp. In addition to that, Cytek Biosciences is 1.3 times more volatile than Orthopediatrics Corp. It trades about 0.01 of its total potential returns per unit of risk. Orthopediatrics Corp is currently generating about 0.16 per unit of volatility. If you would invest  2,245  in Orthopediatrics Corp on October 9, 2024 and sell it today you would earn a total of  132.00  from holding Orthopediatrics Corp or generate 5.88% return on investment over 90 days.

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

Cytek Biosciences  vs.  Orthopediatrics Corp

Cytek Biosciences

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cytek Biosciences are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking signals, Cytek Biosciences sustained solid returns over the last few months and may actually be approaching a breakup point.

Orthopediatrics Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orthopediatrics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Orthopediatrics Corp is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cytek Biosciences and Orthopediatrics Corp

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

The idea behind Cytek Biosciences and Orthopediatrics 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.