Correlation Between Cooper Companies and Apyx Medical

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

By analyzing existing cross correlation between The Cooper Companies and Apyx Medical, you can compare the effects of market volatilities on Cooper Companies and Apyx Medical 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 Cooper Companies with a short position of Apyx Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Companies and Apyx Medical.

Diversification Opportunities for Cooper Companies and Apyx Medical

-0.13

Correlation Coefficient

Cooper Companies  Apyx Medical

Good diversification

The 3 months correlation between Cooper and Apyx is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding The Cooper Companies and Apyx Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apyx Medical and Cooper Companies 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 The Cooper Companies are associated (or correlated) with Apyx Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apyx Medical has no effect on the direction of Cooper Companies i.e., Cooper Companies and Apyx Medical go up and down completely randomly.

Pair Corralation between Cooper Companies and Apyx Medical

Considering the 90-day investment horizon The Cooper Companies is expected to generate 0.25 times more return on investment than Apyx Medical. However, The Cooper Companies is 3.99 times less risky than Apyx Medical. It trades about -0.03 of its potential returns per unit of risk. Apyx Medical is currently generating about -0.08 per unit of risk. If you would invest  9,327  in The Cooper Companies on February 1, 2024 and sell it today you would lose (421.00) from holding The Cooper Companies or give up 4.51% of portfolio value over 90 days.

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

The Cooper Companies  vs.  Apyx Medical

Cooper Companies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Apyx Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apyx Medical 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 basic indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Cooper Companies and Apyx Medical

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

The idea behind The Cooper Companies and Apyx Medical 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.