Correlation Between Pro Dex and Avinger

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

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

Diversification Opportunities for Pro Dex and Avinger

-0.14

Correlation Coefficient

Pro Dex  Avinger

Good diversification

The 3 months correlation between Pro and Avinger is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pro Dex and Avinger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avinger and Pro Dex 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 Pro Dex are associated (or correlated) with Avinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avinger has no effect on the direction of Pro Dex i.e., Pro Dex and Avinger go up and down completely randomly.

Pair Corralation between Pro Dex and Avinger

Given the investment horizon of 90 days Pro Dex is expected to generate 0.4 times more return on investment than Avinger. However, Pro Dex is 2.47 times less risky than Avinger. It trades about 0.05 of its potential returns per unit of risk. Avinger is currently generating about -0.06 per unit of risk. If you would invest  4,591  in Pro Dex on December 28, 2024 and sell it today you would earn a total of  407.00  from holding Pro Dex or generate 8.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	55.0%
Values	Daily Returns

Pro Dex  vs.  Avinger

Pro Dex

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pro Dex are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Pro Dex showed solid returns over the last few months and may actually be approaching a breakup point.

Avinger

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avinger has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's technical and fundamental 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 Pro Dex and Avinger

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

The idea behind Pro Dex and Avinger 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 Stocks Directory module to find actively traded stocks across global markets.