Correlation Between InfuSystems Holdings and AtriCure

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

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

Diversification Opportunities for InfuSystems Holdings and AtriCure

-0.17

Correlation Coefficient

InfuSystems Holdings  AtriCure

Good diversification

The 3 months correlation between InfuSystems and AtriCure is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and AtriCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AtriCure 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 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 InfuSystems Holdings i.e., InfuSystems Holdings and AtriCure go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and AtriCure

Given the investment horizon of 90 days InfuSystems Holdings is expected to generate 0.96 times more return on investment than AtriCure. However, InfuSystems Holdings is 1.04 times less risky than AtriCure. It trades about -0.04 of its potential returns per unit of risk. AtriCure is currently generating about -0.04 per unit of risk. If you would invest  966.00  in InfuSystems Holdings on June 28, 2024 and sell it today you would lose (310.00) from holding InfuSystems Holdings or give up 32.09% 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.  AtriCure

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.

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.

Pair Trading with InfuSystems Holdings and AtriCure

The main advantage of trading using opposite InfuSystems Holdings and AtriCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfuSystems Holdings 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 InfuSystems Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.