Correlation Between CVRx and Hyperfine

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

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

Diversification Opportunities for CVRx and Hyperfine

0.17

Correlation Coefficient

CVRx  Hyperfine

Average diversification

The 3 months correlation between CVRx and Hyperfine is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CVRx Inc and Hyperfine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyperfine and CVRx 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 CVRx Inc are associated (or correlated) with Hyperfine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyperfine has no effect on the direction of CVRx i.e., CVRx and Hyperfine go up and down completely randomly.

Pair Corralation between CVRx and Hyperfine

Given the investment horizon of 90 days CVRx Inc is expected to under-perform the Hyperfine. But the stock apears to be less risky and, when comparing its historical volatility, CVRx Inc is 1.71 times less risky than Hyperfine. The stock trades about -0.03 of its potential returns per unit of risk. The Hyperfine is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  101.00  in Hyperfine on November 29, 2024 and sell it today you would lose (2.00) from holding Hyperfine or give up 1.98% of portfolio value over 90 days.

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

CVRx Inc  vs.  Hyperfine

CVRx Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CVRx Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Hyperfine

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hyperfine are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Hyperfine reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVRx and Hyperfine

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

The idea behind CVRx Inc and Hyperfine 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.