Correlation Between Procept Biorobotics and Pulmonx Corp

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

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

Diversification Opportunities for Procept Biorobotics and Pulmonx Corp

-0.03

Correlation Coefficient

Procept Biorobotics  Pulmonx Corp

Good diversification

The 3 months correlation between Procept and Pulmonx is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Procept Biorobotics Corp and Pulmonx Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulmonx Corp and Procept Biorobotics 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 Procept Biorobotics Corp are associated (or correlated) with Pulmonx Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulmonx Corp has no effect on the direction of Procept Biorobotics i.e., Procept Biorobotics and Pulmonx Corp go up and down completely randomly.

Pair Corralation between Procept Biorobotics and Pulmonx Corp

Given the investment horizon of 90 days Procept Biorobotics Corp is expected to generate 1.16 times more return on investment than Pulmonx Corp. However, Procept Biorobotics is 1.16 times more volatile than Pulmonx Corp. It trades about 0.1 of its potential returns per unit of risk. Pulmonx Corp is currently generating about 0.02 per unit of risk. If you would invest  7,506  in Procept Biorobotics Corp on September 2, 2024 and sell it today you would earn a total of  2,053  from holding Procept Biorobotics Corp or generate 27.35% return on investment over 90 days.

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

Procept Biorobotics Corp  vs.  Pulmonx Corp

Procept Biorobotics Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Procept Biorobotics Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Procept Biorobotics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pulmonx Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pulmonx Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Pulmonx Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Procept Biorobotics and Pulmonx Corp

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

The idea behind Procept Biorobotics Corp and Pulmonx Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.