Correlation Between Delcath Systems and Axogen

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

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

Diversification Opportunities for Delcath Systems and Axogen

0.56

Correlation Coefficient

Delcath Systems  Axogen

Very weak diversification

The 3 months correlation between Delcath and Axogen is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Delcath Systems and Axogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axogen Inc and Delcath Systems 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 Delcath Systems are associated (or correlated) with Axogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axogen Inc has no effect on the direction of Delcath Systems i.e., Delcath Systems and Axogen go up and down completely randomly.

Pair Corralation between Delcath Systems and Axogen

Given the investment horizon of 90 days Delcath Systems is expected to generate 1.31 times less return on investment than Axogen. But when comparing it to its historical volatility, Delcath Systems is 1.05 times less risky than Axogen. It trades about 0.06 of its potential returns per unit of risk. Axogen Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,649  in Axogen Inc on December 29, 2024 and sell it today you would earn a total of  250.00  from holding Axogen Inc or generate 15.16% return on investment over 90 days.

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

Delcath Systems  vs.  Axogen Inc

Delcath Systems

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Delcath Systems are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Delcath Systems demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Axogen Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Axogen Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Axogen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delcath Systems and Axogen

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

The idea behind Delcath Systems and Axogen Inc 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.