Correlation Between Repro Med and AngioDynamics

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

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

Diversification Opportunities for Repro Med and AngioDynamics

0.5

Correlation Coefficient

Repro Med  AngioDynamics

Very weak diversification

The 3 months correlation between Repro and AngioDynamics is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Repro Med Systems and AngioDynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngioDynamics and Repro Med 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 Repro Med Systems are associated (or correlated) with AngioDynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngioDynamics has no effect on the direction of Repro Med i.e., Repro Med and AngioDynamics go up and down completely randomly.

Pair Corralation between Repro Med and AngioDynamics

Given the investment horizon of 90 days Repro Med Systems is expected to under-perform the AngioDynamics. But the stock apears to be less risky and, when comparing its historical volatility, Repro Med Systems is 1.57 times less risky than AngioDynamics. The stock trades about -0.02 of its potential returns per unit of risk. The AngioDynamics is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  693.00  in AngioDynamics on November 29, 2024 and sell it today you would earn a total of  293.00  from holding AngioDynamics or generate 42.28% return on investment over 90 days.

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

Repro Med Systems  vs.  AngioDynamics

Repro Med Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Repro Med Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

AngioDynamics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AngioDynamics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, AngioDynamics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Repro Med and AngioDynamics

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

The idea behind Repro Med Systems and AngioDynamics 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.

Check out your portfolio center.

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.