Correlation Between Varex Imaging and Artivion

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

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

Diversification Opportunities for Varex Imaging and Artivion

0.64

Correlation Coefficient

Varex Imaging  Artivion

Poor diversification

The 3 months correlation between Varex and Artivion is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Varex Imaging Corp and Artivion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artivion and Varex Imaging 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 Varex Imaging Corp 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 Varex Imaging i.e., Varex Imaging and Artivion go up and down completely randomly.

Pair Corralation between Varex Imaging and Artivion

Given the investment horizon of 90 days Varex Imaging Corp is expected to under-perform the Artivion. In addition to that, Varex Imaging is 1.73 times more volatile than Artivion. It trades about -0.09 of its total potential returns per unit of risk. Artivion is currently generating about -0.12 per unit of volatility. If you would invest  2,859  in Artivion on December 29, 2024 and sell it today you would lose (409.00) from holding Artivion or give up 14.31% of portfolio value over 90 days.

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

Varex Imaging Corp  vs.  Artivion

Varex Imaging Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Varex Imaging Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Artivion

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artivion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Varex Imaging and Artivion

The main advantage of trading using opposite Varex Imaging and Artivion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varex Imaging 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 Varex Imaging Corp 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.