Correlation Between Catheter Precision and Phreesia

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

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

Diversification Opportunities for Catheter Precision and Phreesia

0.06

Correlation Coefficient

Catheter Precision  Phreesia

Significant diversification

The 3 months correlation between Catheter and Phreesia is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Catheter Precision and Phreesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phreesia 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 Phreesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phreesia has no effect on the direction of Catheter Precision i.e., Catheter Precision and Phreesia go up and down completely randomly.

Pair Corralation between Catheter Precision and Phreesia

Given the investment horizon of 90 days Catheter Precision is expected to under-perform the Phreesia. In addition to that, Catheter Precision is 2.36 times more volatile than Phreesia. It trades about -0.05 of its total potential returns per unit of risk. Phreesia is currently generating about 0.0 per unit of volatility. If you would invest  3,478  in Phreesia on December 3, 2024 and sell it today you would lose (821.50) from holding Phreesia or give up 23.62% of portfolio value over 90 days.

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

Catheter Precision  vs.  Phreesia

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 current stock price mess, may contribute to short-term losses for the institutional investors.

Phreesia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Phreesia are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent technical indicators, Phreesia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Catheter Precision and Phreesia

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

The idea behind Catheter Precision and Phreesia 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.