Correlation Between Iradimed and Catheter Precision

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

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

Diversification Opportunities for Iradimed and Catheter Precision

-0.14

Correlation Coefficient

Iradimed  Catheter Precision

Good diversification

The 3 months correlation between Iradimed and Catheter is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Iradimed Co and Catheter Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catheter Precision and Iradimed 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 Iradimed Co are associated (or correlated) with Catheter Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catheter Precision has no effect on the direction of Iradimed i.e., Iradimed and Catheter Precision go up and down completely randomly.

Pair Corralation between Iradimed and Catheter Precision

Given the investment horizon of 90 days Iradimed is expected to generate 6.56 times less return on investment than Catheter Precision. But when comparing it to its historical volatility, Iradimed Co is 7.48 times less risky than Catheter Precision. It trades about 0.11 of its potential returns per unit of risk. Catheter Precision is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  34.00  in Catheter Precision on October 7, 2024 and sell it today you would earn a total of  19.00  from holding Catheter Precision or generate 55.88% return on investment over 90 days.

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

Iradimed Co  vs.  Catheter Precision

Iradimed

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Iradimed Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, Iradimed exhibited solid returns over the last few months and may actually be approaching a breakup point.

Catheter Precision

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Catheter Precision are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Catheter Precision disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iradimed and Catheter Precision

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

The idea behind Iradimed Co and Catheter Precision 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..