Correlation Between Acutus Medical and CVRx

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

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

Diversification Opportunities for Acutus Medical and CVRx

-0.16

Correlation Coefficient

Acutus Medical  CVRx

Good diversification

The 3 months correlation between Acutus and CVRx is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Acutus Medical and CVRx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVRx Inc and Acutus 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 Acutus Medical are associated (or correlated) with CVRx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVRx Inc has no effect on the direction of Acutus Medical i.e., Acutus Medical and CVRx go up and down completely randomly.

Pair Corralation between Acutus Medical and CVRx

Given the investment horizon of 90 days Acutus Medical is expected to under-perform the CVRx. But the stock apears to be less risky and, when comparing its historical volatility, Acutus Medical is 1.05 times less risky than CVRx. The stock trades about -0.03 of its potential returns per unit of risk. The CVRx Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,600  in CVRx Inc on September 28, 2024 and sell it today you would lose (283.00) from holding CVRx Inc or give up 17.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	27.42%
Values	Daily Returns

Acutus Medical  vs.  CVRx Inc

Acutus Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acutus Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Acutus Medical is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

CVRx Inc

Risk-Adjusted Performance

10 of 100

Good

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

Pair Trading with Acutus Medical and CVRx

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

The idea behind Acutus Medical and CVRx 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.