Correlation Between Artivion and Anika Therapeutics

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

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

Diversification Opportunities for Artivion and Anika Therapeutics

-0.67

Correlation Coefficient

Artivion  Anika Therapeutics

Excellent diversification

The 3 months correlation between Artivion and Anika is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Artivion and Anika Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anika Therapeutics and Artivion 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 Artivion are associated (or correlated) with Anika Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anika Therapeutics has no effect on the direction of Artivion i.e., Artivion and Anika Therapeutics go up and down completely randomly.

Pair Corralation between Artivion and Anika Therapeutics

Given the investment horizon of 90 days Artivion is expected to generate 0.29 times more return on investment than Anika Therapeutics. However, Artivion is 3.41 times less risky than Anika Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Anika Therapeutics is currently generating about -0.22 per unit of risk. If you would invest  2,689  in Artivion on August 17, 2024 and sell it today you would earn a total of  10.00  from holding Artivion or generate 0.37% return on investment over 90 days.

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

Artivion  vs.  Anika Therapeutics

Artivion

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Artivion are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Artivion may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Anika Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anika Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Artivion and Anika Therapeutics

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

The idea behind Artivion and Anika Therapeutics 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.