Correlation Between Milestone Scientific and LeMaitre Vascular

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

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

Diversification Opportunities for Milestone Scientific and LeMaitre Vascular

0.62

Correlation Coefficient

Milestone Scientific  LeMaitre Vascular

Poor diversification

The 3 months correlation between Milestone and LeMaitre is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Milestone Scientific and LeMaitre Vascular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LeMaitre Vascular and Milestone Scientific 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 Milestone Scientific are associated (or correlated) with LeMaitre Vascular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LeMaitre Vascular has no effect on the direction of Milestone Scientific i.e., Milestone Scientific and LeMaitre Vascular go up and down completely randomly.

Pair Corralation between Milestone Scientific and LeMaitre Vascular

Given the investment horizon of 90 days Milestone Scientific is expected to under-perform the LeMaitre Vascular. In addition to that, Milestone Scientific is 2.15 times more volatile than LeMaitre Vascular. It trades about -0.1 of its total potential returns per unit of risk. LeMaitre Vascular is currently generating about -0.11 per unit of volatility. If you would invest  9,467  in LeMaitre Vascular on January 8, 2025 and sell it today you would lose (1,489) from holding LeMaitre Vascular or give up 15.73% of portfolio value over 90 days.

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

Milestone Scientific  vs.  LeMaitre Vascular

Milestone Scientific

Risk-Adjusted Performance

Very Weak

Over the last 90 days Milestone Scientific has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

LeMaitre Vascular

Risk-Adjusted Performance

Very Weak

Over the last 90 days LeMaitre Vascular has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Milestone Scientific and LeMaitre Vascular

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

The idea behind Milestone Scientific and LeMaitre Vascular 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..