Correlation Between InfuSystems Holdings and AngioDynamics

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

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

Diversification Opportunities for InfuSystems Holdings and AngioDynamics

-0.3

Correlation Coefficient

InfuSystems Holdings  AngioDynamics

Very good diversification

The 3 months correlation between InfuSystems and AngioDynamics is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and AngioDynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngioDynamics and InfuSystems Holdings 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 InfuSystems Holdings are associated (or correlated) with AngioDynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngioDynamics has no effect on the direction of InfuSystems Holdings i.e., InfuSystems Holdings and AngioDynamics go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and AngioDynamics

Given the investment horizon of 90 days InfuSystems Holdings is expected to under-perform the AngioDynamics. In addition to that, InfuSystems Holdings is 2.37 times more volatile than AngioDynamics. It trades about -0.1 of its total potential returns per unit of risk. AngioDynamics is currently generating about 0.0 per unit of volatility. If you would invest  742.00  in AngioDynamics on June 28, 2024 and sell it today you would lose (2.00) from holding AngioDynamics or give up 0.27% of portfolio value over 90 days.

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

InfuSystems Holdings  vs.  AngioDynamics

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 latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

AngioDynamics

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AngioDynamics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, AngioDynamics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with InfuSystems Holdings and AngioDynamics

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

The idea behind InfuSystems Holdings and AngioDynamics 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..