Correlation Between LeMaitre Vascular and Milestone Scientific

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

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

Diversification Opportunities for LeMaitre Vascular and Milestone Scientific

0.54

Correlation Coefficient

LeMaitre Vascular  Milestone Scientific

Very weak diversification

The 3 months correlation between LeMaitre and Milestone is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding LeMaitre Vascular and Milestone Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Milestone Scientific 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 Milestone Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Milestone Scientific has no effect on the direction of LeMaitre Vascular i.e., LeMaitre Vascular and Milestone Scientific go up and down completely randomly.

Pair Corralation between LeMaitre Vascular and Milestone Scientific

Given the investment horizon of 90 days LeMaitre Vascular is expected to under-perform the Milestone Scientific. But the stock apears to be less risky and, when comparing its historical volatility, LeMaitre Vascular is 2.6 times less risky than Milestone Scientific. The stock trades about -0.07 of its potential returns per unit of risk. The Milestone Scientific is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  93.00  in Milestone Scientific on December 30, 2024 and sell it today you would earn a total of  6.00  from holding Milestone Scientific or generate 6.45% return on investment over 90 days.

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

LeMaitre Vascular  vs.  Milestone Scientific

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.

Milestone Scientific

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Milestone Scientific are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Milestone Scientific unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LeMaitre Vascular and Milestone Scientific

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

The idea behind LeMaitre Vascular and Milestone Scientific 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.