Correlation Between Mednax and Cutera

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

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

Diversification Opportunities for Mednax and Cutera

0.11

Correlation Coefficient

Mednax  Cutera

Average diversification

The 3 months correlation between Mednax and Cutera is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Mednax Inc and Cutera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cutera Inc and Mednax 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 Mednax Inc are associated (or correlated) with Cutera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cutera Inc has no effect on the direction of Mednax i.e., Mednax and Cutera go up and down completely randomly.

Pair Corralation between Mednax and Cutera

Allowing for the 90-day total investment horizon Mednax Inc is expected to generate 0.26 times more return on investment than Cutera. However, Mednax Inc is 3.77 times less risky than Cutera. It trades about 0.08 of its potential returns per unit of risk. Cutera Inc is currently generating about -0.1 per unit of risk. If you would invest  1,321  in Mednax Inc on December 28, 2024 and sell it today you would earn a total of  181.00  from holding Mednax Inc or generate 13.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	83.33%
Values	Daily Returns

Mednax Inc  vs.  Cutera Inc

Mednax Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mednax Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Mednax exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cutera Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cutera Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Mednax and Cutera

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

The idea behind Mednax Inc and Cutera Inc 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.