Correlation Between Orthopediatrics Corp and Catheter Precision

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

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

Diversification Opportunities for Orthopediatrics Corp and Catheter Precision

0.23

Correlation Coefficient

Orthopediatrics Corp  Catheter Precision

Modest diversification

The 3 months correlation between Orthopediatrics and Catheter is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Orthopediatrics Corp and Catheter Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catheter Precision and Orthopediatrics Corp 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 Orthopediatrics Corp 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 Orthopediatrics Corp i.e., Orthopediatrics Corp and Catheter Precision go up and down completely randomly.

Pair Corralation between Orthopediatrics Corp and Catheter Precision

Given the investment horizon of 90 days Orthopediatrics Corp is expected to generate 0.53 times more return on investment than Catheter Precision. However, Orthopediatrics Corp is 1.87 times less risky than Catheter Precision. It trades about 0.05 of its potential returns per unit of risk. Catheter Precision is currently generating about 0.0 per unit of risk. If you would invest  2,338  in Orthopediatrics Corp on December 26, 2024 and sell it today you would earn a total of  156.00  from holding Orthopediatrics Corp or generate 6.67% return on investment over 90 days.

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

Orthopediatrics Corp  vs.  Catheter Precision

Orthopediatrics Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Orthopediatrics Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Orthopediatrics Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Catheter Precision

Risk-Adjusted Performance

Very Weak

Over the last 90 days Catheter Precision has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Catheter Precision is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Orthopediatrics Corp and Catheter Precision

The main advantage of trading using opposite Orthopediatrics Corp and Catheter Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orthopediatrics Corp 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 Orthopediatrics Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.