Correlation Between Catheter Precision and Myomo

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

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

Diversification Opportunities for Catheter Precision and Myomo

0.44

Correlation Coefficient

Catheter Precision  Myomo

Very weak diversification

The 3 months correlation between Catheter and Myomo is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Catheter Precision and Myomo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myomo Inc and Catheter Precision 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 Catheter Precision are associated (or correlated) with Myomo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myomo Inc has no effect on the direction of Catheter Precision i.e., Catheter Precision and Myomo go up and down completely randomly.

Pair Corralation between Catheter Precision and Myomo

Given the investment horizon of 90 days Catheter Precision is expected to generate 1.46 times more return on investment than Myomo. However, Catheter Precision is 1.46 times more volatile than Myomo Inc. It trades about -0.01 of its potential returns per unit of risk. Myomo Inc is currently generating about -0.02 per unit of risk. If you would invest  39.00  in Catheter Precision on December 2, 2024 and sell it today you would lose (4.00) from holding Catheter Precision or give up 10.26% of portfolio value over 90 days.

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

Catheter Precision  vs.  Myomo Inc

Catheter Precision

Risk-Adjusted Performance

Very Weak

Over the last 90 days Catheter Precision has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Catheter Precision is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Myomo Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Myomo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Myomo is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Catheter Precision and Myomo

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

The idea behind Catheter Precision and Myomo 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.