Correlation Between LeMaitre Vascular and Repro Med

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

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

Diversification Opportunities for LeMaitre Vascular and Repro Med

0.77

Correlation Coefficient

LeMaitre Vascular  Repro Med

Poor diversification

The 3 months correlation between LeMaitre and Repro is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding LeMaitre Vascular and Repro Med Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repro Med Systems and LeMaitre Vascular 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 LeMaitre Vascular are associated (or correlated) with Repro Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repro Med Systems has no effect on the direction of LeMaitre Vascular i.e., LeMaitre Vascular and Repro Med go up and down completely randomly.

Pair Corralation between LeMaitre Vascular and Repro Med

Given the investment horizon of 90 days LeMaitre Vascular is expected to generate 1.77 times less return on investment than Repro Med. But when comparing it to its historical volatility, LeMaitre Vascular is 1.67 times less risky than Repro Med. It trades about 0.16 of its potential returns per unit of risk. Repro Med Systems is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  231.00  in Repro Med Systems on August 16, 2024 and sell it today you would earn a total of  89.00  from holding Repro Med Systems or generate 38.53% return on investment over 90 days.

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

LeMaitre Vascular  vs.  Repro Med Systems

LeMaitre Vascular

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LeMaitre Vascular are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, LeMaitre Vascular unveiled solid returns over the last few months and may actually be approaching a breakup point.

Repro Med Systems

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Repro Med Systems are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Repro Med exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LeMaitre Vascular and Repro Med

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

The idea behind LeMaitre Vascular and Repro Med Systems 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.