Correlation Between CVRx and STRATA Skin

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

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

Diversification Opportunities for CVRx and STRATA Skin

0.39

Correlation Coefficient

CVRx  STRATA Skin

Weak diversification

The 3 months correlation between CVRx and STRATA is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CVRx Inc and STRATA Skin Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRATA Skin Sciences 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 STRATA Skin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRATA Skin Sciences has no effect on the direction of CVRx i.e., CVRx and STRATA Skin go up and down completely randomly.

Pair Corralation between CVRx and STRATA Skin

Given the investment horizon of 90 days CVRx Inc is expected to generate 1.07 times more return on investment than STRATA Skin. However, CVRx is 1.07 times more volatile than STRATA Skin Sciences. It trades about 0.0 of its potential returns per unit of risk. STRATA Skin Sciences is currently generating about -0.05 per unit of risk. If you would invest  1,317  in CVRx Inc on December 27, 2024 and sell it today you would lose (57.00) from holding CVRx Inc or give up 4.33% of portfolio value over 90 days.

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

CVRx Inc  vs.  STRATA Skin Sciences

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 fairly strong basic indicators, CVRx is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

STRATA Skin Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days STRATA Skin Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with CVRx and STRATA Skin

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

The idea behind CVRx Inc and STRATA Skin Sciences 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.