Correlation Between Major Drilling and AngioDynamics

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

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

Diversification Opportunities for Major Drilling and AngioDynamics

0.54

Correlation Coefficient

Major Drilling  AngioDynamics

Very weak diversification

The 3 months correlation between Major and AngioDynamics is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Major Drilling Group and AngioDynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngioDynamics and Major Drilling 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 Major Drilling Group 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 Major Drilling i.e., Major Drilling and AngioDynamics go up and down completely randomly.

Pair Corralation between Major Drilling and AngioDynamics

Assuming the 90 days horizon Major Drilling Group is expected to generate 1.01 times more return on investment than AngioDynamics. However, Major Drilling is 1.01 times more volatile than AngioDynamics. It trades about 0.05 of its potential returns per unit of risk. AngioDynamics is currently generating about -0.06 per unit of risk. If you would invest  569.00  in Major Drilling Group on February 3, 2025 and sell it today you would earn a total of  45.00  from holding Major Drilling Group or generate 7.91% return on investment over 90 days.

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

Major Drilling Group  vs.  AngioDynamics

Major Drilling Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Major Drilling Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Major Drilling may actually be approaching a critical reversion point that can send shares even higher in June 2025.

AngioDynamics

Risk-Adjusted Performance

Very Weak

Over the last 90 days AngioDynamics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in June 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Major Drilling and AngioDynamics

The main advantage of trading using opposite Major Drilling and AngioDynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Major Drilling 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 Major Drilling Group 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.