Correlation Between Outset Medical and Axogen

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

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

Diversification Opportunities for Outset Medical and Axogen

-0.92

Correlation Coefficient

Outset Medical  Axogen

Pay attention - limited upside

The 3 months correlation between Outset and Axogen is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and Axogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axogen Inc and Outset Medical 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 Outset Medical are associated (or correlated) with Axogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axogen Inc has no effect on the direction of Outset Medical i.e., Outset Medical and Axogen go up and down completely randomly.

Pair Corralation between Outset Medical and Axogen

Allowing for the 90-day total investment horizon Outset Medical is expected to under-perform the Axogen. In addition to that, Outset Medical is 4.18 times more volatile than Axogen Inc. It trades about -0.06 of its total potential returns per unit of risk. Axogen Inc is currently generating about 0.22 per unit of volatility. If you would invest  1,265  in Axogen Inc on June 29, 2024 and sell it today you would earn a total of  115.00  from holding Axogen Inc or generate 9.09% return on investment over 90 days.

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

Outset Medical  vs.  Axogen Inc

Outset Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Outset Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in October 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Axogen Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Axogen Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Axogen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Outset Medical and Axogen

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

The idea behind Outset Medical and Axogen Inc 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.