Correlation Between Tactile Systems and Artivion

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

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

Diversification Opportunities for Tactile Systems and Artivion

0.66

Correlation Coefficient

Tactile Systems  Artivion

Poor diversification

The 3 months correlation between Tactile and Artivion is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Tactile Systems Technology and Artivion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artivion and Tactile Systems 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 Tactile Systems Technology are associated (or correlated) with Artivion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artivion has no effect on the direction of Tactile Systems i.e., Tactile Systems and Artivion go up and down completely randomly.

Pair Corralation between Tactile Systems and Artivion

Given the investment horizon of 90 days Tactile Systems Technology is expected to generate 1.85 times more return on investment than Artivion. However, Tactile Systems is 1.85 times more volatile than Artivion. It trades about 0.18 of its potential returns per unit of risk. Artivion is currently generating about 0.07 per unit of risk. If you would invest  1,369  in Tactile Systems Technology on August 30, 2024 and sell it today you would earn a total of  524.00  from holding Tactile Systems Technology or generate 38.28% return on investment over 90 days.

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

Tactile Systems Technology  vs.  Artivion

Tactile Systems Tech

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tactile Systems Technology are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Tactile Systems exhibited solid returns over the last few months and may actually be approaching a breakup point.

Artivion

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Artivion are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Artivion may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Tactile Systems and Artivion

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

The idea behind Tactile Systems Technology and Artivion 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.