Correlation Between Applied Opt and AtriCure

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

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

Diversification Opportunities for Applied Opt and AtriCure

-0.45

Correlation Coefficient

Applied Opt  AtriCure

Very good diversification

The 3 months correlation between Applied and AtriCure is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Applied Opt and AtriCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AtriCure and Applied Opt 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 Applied Opt are associated (or correlated) with AtriCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AtriCure has no effect on the direction of Applied Opt i.e., Applied Opt and AtriCure go up and down completely randomly.

Pair Corralation between Applied Opt and AtriCure

Given the investment horizon of 90 days Applied Opt is expected to generate 1.04 times less return on investment than AtriCure. In addition to that, Applied Opt is 1.82 times more volatile than AtriCure. It trades about 0.03 of its total potential returns per unit of risk. AtriCure is currently generating about 0.05 per unit of volatility. If you would invest  3,277  in AtriCure on June 30, 2025 and sell it today you would earn a total of  243.00  from holding AtriCure or generate 7.42% return on investment over 90 days.

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

Applied Opt  vs.  AtriCure

Applied Opt

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Opt are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Applied Opt may actually be approaching a critical reversion point that can send shares even higher in October 2025.

AtriCure

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in AtriCure are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, AtriCure may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Applied Opt and AtriCure

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

The idea behind Applied Opt and AtriCure 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.

Check out your portfolio center.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.