Correlation Between Envista Holdings and Akoya Biosciences

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

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

Diversification Opportunities for Envista Holdings and Akoya Biosciences

0.56

Correlation Coefficient

Envista Holdings  Akoya Biosciences

Very weak diversification

The 3 months correlation between Envista and Akoya is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Envista Holdings Corp and Akoya Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akoya Biosciences and Envista 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 Envista Holdings Corp are associated (or correlated) with Akoya Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akoya Biosciences has no effect on the direction of Envista Holdings i.e., Envista Holdings and Akoya Biosciences go up and down completely randomly.

Pair Corralation between Envista Holdings and Akoya Biosciences

Given the investment horizon of 90 days Envista Holdings is expected to generate 2.42 times less return on investment than Akoya Biosciences. But when comparing it to its historical volatility, Envista Holdings Corp is 1.97 times less risky than Akoya Biosciences. It trades about 0.13 of its potential returns per unit of risk. Akoya Biosciences is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  213.00  in Akoya Biosciences on August 14, 2024 and sell it today you would earn a total of  109.00  from holding Akoya Biosciences or generate 51.17% return on investment over 90 days.

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

Envista Holdings Corp  vs.  Akoya Biosciences

Envista Holdings Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Envista Holdings Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Envista Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Akoya Biosciences

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Akoya Biosciences are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Akoya Biosciences sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Envista Holdings and Akoya Biosciences

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

The idea behind Envista Holdings Corp and Akoya Biosciences 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.