Correlation Between Anika Therapeutics and CONMED

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

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

Diversification Opportunities for Anika Therapeutics and CONMED

-0.49

Correlation Coefficient

Anika Therapeutics  CONMED

Very good diversification

The 3 months correlation between Anika and CONMED is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Anika Therapeutics and CONMED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONMED and Anika Therapeutics 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 Anika Therapeutics are associated (or correlated) with CONMED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONMED has no effect on the direction of Anika Therapeutics i.e., Anika Therapeutics and CONMED go up and down completely randomly.

Pair Corralation between Anika Therapeutics and CONMED

Given the investment horizon of 90 days Anika Therapeutics is expected to under-perform the CONMED. In addition to that, Anika Therapeutics is 1.81 times more volatile than CONMED. It trades about -0.09 of its total potential returns per unit of risk. CONMED is currently generating about -0.01 per unit of volatility. If you would invest  7,520  in CONMED on September 13, 2024 and sell it today you would lose (188.00) from holding CONMED or give up 2.5% of portfolio value over 90 days.

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

Anika Therapeutics  vs.  CONMED

Anika Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anika Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

CONMED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONMED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, CONMED is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Anika Therapeutics and CONMED

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

The idea behind Anika Therapeutics and CONMED 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.