Correlation Between AtriCure and InfuSystems Holdings

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

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

Diversification Opportunities for AtriCure and InfuSystems Holdings

-0.17

Correlation Coefficient

AtriCure  InfuSystems Holdings

Good diversification

The 3 months correlation between AtriCure and InfuSystems is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding AtriCure and InfuSystems Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfuSystems Holdings and AtriCure 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 AtriCure are associated (or correlated) with InfuSystems Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfuSystems Holdings has no effect on the direction of AtriCure i.e., AtriCure and InfuSystems Holdings go up and down completely randomly.

Pair Corralation between AtriCure and InfuSystems Holdings

Given the investment horizon of 90 days AtriCure is expected to generate 0.49 times more return on investment than InfuSystems Holdings. However, AtriCure is 2.05 times less risky than InfuSystems Holdings. It trades about 0.29 of its potential returns per unit of risk. InfuSystems Holdings is currently generating about -0.1 per unit of risk. If you would invest  2,560  in AtriCure on June 28, 2024 and sell it today you would earn a total of  282.00  from holding AtriCure or generate 11.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

AtriCure  vs.  InfuSystems Holdings

AtriCure

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AtriCure are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, AtriCure exhibited solid returns over the last few months and may actually be approaching a breakup point.

InfuSystems Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days InfuSystems Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, InfuSystems Holdings is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AtriCure and InfuSystems Holdings

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

The idea behind AtriCure and InfuSystems Holdings 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 Stocks Directory module to find actively traded stocks across global markets.