Correlation Between LeMaitre Vascular and AtriCure

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

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

Diversification Opportunities for LeMaitre Vascular and AtriCure

0.63

Correlation Coefficient

LeMaitre Vascular  AtriCure

Poor diversification

The 3 months correlation between LeMaitre and AtriCure is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding LeMaitre Vascular and AtriCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AtriCure and LeMaitre Vascular 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 LeMaitre Vascular are associated (or correlated) with AtriCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AtriCure has no effect on the direction of LeMaitre Vascular i.e., LeMaitre Vascular and AtriCure go up and down completely randomly.

Pair Corralation between LeMaitre Vascular and AtriCure

Given the investment horizon of 90 days LeMaitre Vascular is expected to under-perform the AtriCure. But the stock apears to be less risky and, when comparing its historical volatility, LeMaitre Vascular is 1.53 times less risky than AtriCure. The stock trades about -0.07 of its potential returns per unit of risk. The AtriCure is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,025  in AtriCure on December 30, 2024 and sell it today you would earn a total of  158.00  from holding AtriCure or generate 5.22% return on investment over 90 days.

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

LeMaitre Vascular  vs.  AtriCure

LeMaitre Vascular

Risk-Adjusted Performance

Very Weak

Over the last 90 days LeMaitre Vascular has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

AtriCure

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AtriCure are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, AtriCure may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with LeMaitre Vascular and AtriCure

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

The idea behind LeMaitre Vascular and AtriCure 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.