Correlation Between Rapid Micro and Accuray Incorporated

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

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

Diversification Opportunities for Rapid Micro and Accuray Incorporated

0.39

Correlation Coefficient

Rapid Micro  Accuray Incorporated

Weak diversification

The 3 months correlation between Rapid and Accuray is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Rapid Micro Biosystems and Accuray Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accuray Incorporated and Rapid Micro 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 Rapid Micro Biosystems are associated (or correlated) with Accuray Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accuray Incorporated has no effect on the direction of Rapid Micro i.e., Rapid Micro and Accuray Incorporated go up and down completely randomly.

Pair Corralation between Rapid Micro and Accuray Incorporated

Given the investment horizon of 90 days Rapid Micro Biosystems is expected to under-perform the Accuray Incorporated. But the stock apears to be less risky and, when comparing its historical volatility, Rapid Micro Biosystems is 1.05 times less risky than Accuray Incorporated. The stock trades about -0.19 of its potential returns per unit of risk. The Accuray Incorporated is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  203.00  in Accuray Incorporated on October 5, 2024 and sell it today you would lose (5.00) from holding Accuray Incorporated or give up 2.46% of portfolio value over 90 days.

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

Rapid Micro Biosystems  vs.  Accuray Incorporated

Rapid Micro Biosystems

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rapid Micro Biosystems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, Rapid Micro is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Accuray Incorporated

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Accuray Incorporated are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Accuray Incorporated may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Rapid Micro and Accuray Incorporated

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

The idea behind Rapid Micro Biosystems and Accuray Incorporated 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.