Correlation Between OraSure Technologies and AtriCure

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

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

Diversification Opportunities for OraSure Technologies and AtriCure

0.34

Correlation Coefficient

OraSure Technologies  AtriCure

Weak diversification

The 3 months correlation between OraSure and AtriCure is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding OraSure Technologies and AtriCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AtriCure and OraSure Technologies 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 OraSure Technologies 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 OraSure Technologies i.e., OraSure Technologies and AtriCure go up and down completely randomly.

Pair Corralation between OraSure Technologies and AtriCure

Given the investment horizon of 90 days OraSure Technologies is expected to generate 18.12 times less return on investment than AtriCure. In addition to that, OraSure Technologies is 1.4 times more volatile than AtriCure. It trades about 0.0 of its total potential returns per unit of risk. AtriCure is currently generating about 0.07 per unit of volatility. If you would invest  3,051  in AtriCure on December 22, 2024 and sell it today you would earn a total of  303.00  from holding AtriCure or generate 9.93% return on investment over 90 days.

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

OraSure Technologies  vs.  AtriCure

OraSure Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days OraSure Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, OraSure Technologies is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

AtriCure

Risk-Adjusted Performance

Modest

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

Pair Trading with OraSure Technologies and AtriCure

The main advantage of trading using opposite OraSure Technologies and AtriCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OraSure Technologies 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 OraSure Technologies 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.