Correlation Between CVRx and Sientra

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

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

Diversification Opportunities for CVRx and Sientra

0.44

Correlation Coefficient

CVRx  Sientra

Very weak diversification

The 3 months correlation between CVRx and Sientra is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding CVRx Inc and Sientra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sientra 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 Sientra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sientra has no effect on the direction of CVRx i.e., CVRx and Sientra go up and down completely randomly.

Pair Corralation between CVRx and Sientra

If you would invest  1,199  in CVRx Inc on September 26, 2024 and sell it today you would earn a total of  91.00  from holding CVRx Inc or generate 7.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.8%
Values	Daily Returns

CVRx Inc  vs.  Sientra

CVRx Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CVRx Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, CVRx showed solid returns over the last few months and may actually be approaching a breakup point.

Sientra

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sientra has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Sientra is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CVRx and Sientra

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

The idea behind CVRx Inc and Sientra 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.