Correlation Between Cutera and NuVasive

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

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

Diversification Opportunities for Cutera and NuVasive

0.0

Correlation Coefficient

Cutera  NuVasive

Pay attention - limited upside

The 3 months correlation between Cutera and NuVasive is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cutera Inc and NuVasive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuVasive and Cutera 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 Cutera Inc are associated (or correlated) with NuVasive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuVasive has no effect on the direction of Cutera i.e., Cutera and NuVasive go up and down completely randomly.

Pair Corralation between Cutera and NuVasive

If you would invest (100.00) in NuVasive on December 29, 2024 and sell it today you would earn a total of  100.00  from holding NuVasive or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cutera Inc  vs.  NuVasive

Cutera Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cutera Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

NuVasive

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Cutera and NuVasive

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

The idea behind Cutera Inc and NuVasive 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.