Correlation Between Neuropace and Artivion

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

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

Diversification Opportunities for Neuropace and Artivion

0.47

Correlation Coefficient

Neuropace  Artivion

Very weak diversification

The 3 months correlation between Neuropace and Artivion is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Neuropace and Artivion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artivion and Neuropace 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 Neuropace are associated (or correlated) with Artivion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artivion has no effect on the direction of Neuropace i.e., Neuropace and Artivion go up and down completely randomly.

Pair Corralation between Neuropace and Artivion

Given the investment horizon of 90 days Neuropace is expected to generate 1.86 times more return on investment than Artivion. However, Neuropace is 1.86 times more volatile than Artivion. It trades about 0.13 of its potential returns per unit of risk. Artivion is currently generating about -0.12 per unit of risk. If you would invest  1,060  in Neuropace on November 29, 2024 and sell it today you would earn a total of  288.00  from holding Neuropace or generate 27.17% return on investment over 90 days.

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

Neuropace  vs.  Artivion

Neuropace

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neuropace are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Neuropace exhibited solid returns over the last few months and may actually be approaching a breakup point.

Artivion

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artivion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Neuropace and Artivion

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

The idea behind Neuropace and Artivion 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.