Correlation Between Paragon 28 and Integer Holdings

Can any of the company-specific risk be diversified away by investing in both Paragon 28 and Integer 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 Paragon 28 and Integer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Paragon 28 and Integer Holdings Corp, you can compare the effects of market volatilities on Paragon 28 and Integer 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 Paragon 28 with a short position of Integer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paragon 28 and Integer Holdings.

Diversification Opportunities for Paragon 28 and Integer Holdings

0.06

Correlation Coefficient

Paragon 28  Integer Holdings

Significant diversification

The 3 months correlation between Paragon and Integer is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Paragon 28 and Integer Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integer Holdings Corp and Paragon 28 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 Paragon 28 are associated (or correlated) with Integer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integer Holdings Corp has no effect on the direction of Paragon 28 i.e., Paragon 28 and Integer Holdings go up and down completely randomly.

Pair Corralation between Paragon 28 and Integer Holdings

Considering the 90-day investment horizon Paragon 28 is expected to generate 4.84 times more return on investment than Integer Holdings. However, Paragon 28 is 4.84 times more volatile than Integer Holdings Corp. It trades about 0.29 of its potential returns per unit of risk. Integer Holdings Corp is currently generating about 0.05 per unit of risk. If you would invest  583.00  in Paragon 28 on August 17, 2024 and sell it today you would earn a total of  387.00  from holding Paragon 28 or generate 66.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Paragon 28  vs.  Integer Holdings Corp

Paragon 28

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Paragon 28 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Paragon 28 sustained solid returns over the last few months and may actually be approaching a breakup point.

Integer Holdings Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integer Holdings Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, Integer Holdings may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Paragon 28 and Integer Holdings

The main advantage of trading using opposite Paragon 28 and Integer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paragon 28 position performs unexpectedly, Integer 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 Integer Holdings will offset losses from the drop in Integer Holdings' long position.

The idea behind Paragon 28 and Integer Holdings Corp 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.