Correlation Between Tactile Systems and Hyperfine

Can any of the company-specific risk be diversified away by investing in both Tactile Systems and Hyperfine 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 Hyperfine 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 Hyperfine, you can compare the effects of market volatilities on Tactile Systems and Hyperfine 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 Hyperfine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tactile Systems and Hyperfine.

Diversification Opportunities for Tactile Systems and Hyperfine

-0.04

Correlation Coefficient

Tactile Systems  Hyperfine

Good diversification

The 3 months correlation between Tactile and Hyperfine is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Tactile Systems Technology and Hyperfine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyperfine 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 Hyperfine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyperfine has no effect on the direction of Tactile Systems i.e., Tactile Systems and Hyperfine go up and down completely randomly.

Pair Corralation between Tactile Systems and Hyperfine

Given the investment horizon of 90 days Tactile Systems Technology is expected to under-perform the Hyperfine. But the stock apears to be less risky and, when comparing its historical volatility, Tactile Systems Technology is 2.86 times less risky than Hyperfine. The stock trades about -0.2 of its potential returns per unit of risk. The Hyperfine is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  101.00  in Hyperfine on November 29, 2024 and sell it today you would lose (2.00) from holding Hyperfine or give up 1.98% of portfolio value over 90 days.

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

Tactile Systems Technology  vs.  Hyperfine

Tactile Systems Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tactile Systems Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Hyperfine

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hyperfine are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Hyperfine reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tactile Systems and Hyperfine

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

The idea behind Tactile Systems Technology and Hyperfine 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.