Correlation Between Treace Medical and Axogen

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

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

Diversification Opportunities for Treace Medical and Axogen

0.65

Correlation Coefficient

Treace Medical  Axogen

Poor diversification

The 3 months correlation between Treace and Axogen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Treace Medical Concepts and Axogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axogen Inc and Treace 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 Treace Medical Concepts 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 Treace Medical i.e., Treace Medical and Axogen go up and down completely randomly.

Pair Corralation between Treace Medical and Axogen

Given the investment horizon of 90 days Treace Medical Concepts is expected to under-perform the Axogen. But the stock apears to be less risky and, when comparing its historical volatility, Treace Medical Concepts is 1.44 times less risky than Axogen. The stock trades about -0.15 of its potential returns per unit of risk. The Axogen Inc is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  1,675  in Axogen Inc on May 3, 2025 and sell it today you would lose (408.00) from holding Axogen Inc or give up 24.36% of portfolio value over 90 days.

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

Treace Medical Concepts  vs.  Axogen Inc

Treace Medical Concepts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Treace Medical Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Axogen Inc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Treace Medical and Axogen

The main advantage of trading using opposite Treace Medical and Axogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treace 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 Treace Medical Concepts 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.