Correlation Between Escalon Medical and Axonics Modulation

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

By analyzing existing cross correlation between Escalon Medical Corp and Axonics Modulation Technologies, you can compare the effects of market volatilities on Escalon Medical and Axonics Modulation 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 Escalon Medical with a short position of Axonics Modulation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Escalon Medical and Axonics Modulation.

Diversification Opportunities for Escalon Medical and Axonics Modulation

-0.48

Correlation Coefficient

Escalon Medical  Axonics Modulation

Very good diversification

The 3 months correlation between Escalon and Axonics is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Escalon Medical Corp and Axonics Modulation Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axonics Modulation and Escalon Medical 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 Escalon Medical Corp are associated (or correlated) with Axonics Modulation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axonics Modulation has no effect on the direction of Escalon Medical i.e., Escalon Medical and Axonics Modulation go up and down completely randomly.

Pair Corralation between Escalon Medical and Axonics Modulation

If you would invest  6,916  in Axonics Modulation Technologies on September 3, 2024 and sell it today you would earn a total of  182.00  from holding Axonics Modulation Technologies or generate 2.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.85%
Values	Daily Returns

Escalon Medical Corp  vs.  Axonics Modulation Technologie

Escalon Medical Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Escalon Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Escalon Medical is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Axonics Modulation

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Axonics Modulation Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Axonics Modulation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Escalon Medical and Axonics Modulation

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

The idea behind Escalon Medical Corp and Axonics Modulation Technologies 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.