Correlation Between Rapid Therapeutic and Axogen

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

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

Diversification Opportunities for Rapid Therapeutic and Axogen

0.24

Correlation Coefficient

Rapid Therapeutic  Axogen

Modest diversification

The 3 months correlation between Rapid and Axogen is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Rapid Therapeutic Science and Axogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axogen Inc and Rapid Therapeutic 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 Therapeutic Science are associated (or correlated) with Axogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axogen Inc has no effect on the direction of Rapid Therapeutic i.e., Rapid Therapeutic and Axogen go up and down completely randomly.

Pair Corralation between Rapid Therapeutic and Axogen

Given the investment horizon of 90 days Rapid Therapeutic Science is expected to generate 4.48 times more return on investment than Axogen. However, Rapid Therapeutic is 4.48 times more volatile than Axogen Inc. It trades about 0.06 of its potential returns per unit of risk. Axogen Inc is currently generating about 0.12 per unit of risk. If you would invest  0.50  in Rapid Therapeutic Science on October 12, 2024 and sell it today you would lose (0.30) from holding Rapid Therapeutic Science or give up 60.0% of portfolio value over 90 days.

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

Rapid Therapeutic Science  vs.  Axogen Inc

Rapid Therapeutic Science

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rapid Therapeutic Science are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Rapid Therapeutic disclosed solid returns over the last few months and may actually be approaching a breakup point.

Axogen Inc

Risk-Adjusted Performance

3 of 100

Weak

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

Pair Trading with Rapid Therapeutic and Axogen

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

The idea behind Rapid Therapeutic Science and Axogen Inc 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.