Correlation Between Clearpoint Neuro and Shockwave Medical

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

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

Diversification Opportunities for Clearpoint Neuro and Shockwave Medical

0.45

Correlation Coefficient

Clearpoint Neuro  Shockwave Medical

Very weak diversification

The 3 months correlation between Clearpoint and Shockwave is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Clearpoint Neuro and Shockwave Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shockwave Medical and Clearpoint Neuro 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 Clearpoint Neuro are associated (or correlated) with Shockwave Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shockwave Medical has no effect on the direction of Clearpoint Neuro i.e., Clearpoint Neuro and Shockwave Medical go up and down completely randomly.

Pair Corralation between Clearpoint Neuro and Shockwave Medical

If you would invest  1,262  in Clearpoint Neuro on August 31, 2024 and sell it today you would lose (51.00) from holding Clearpoint Neuro or give up 4.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Clearpoint Neuro  vs.  Shockwave Medical

Clearpoint Neuro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clearpoint Neuro has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Clearpoint Neuro is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Shockwave Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shockwave Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Shockwave Medical is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Clearpoint Neuro and Shockwave Medical

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

The idea behind Clearpoint Neuro and Shockwave Medical 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.