Correlation Between Carl Zeiss and AngioDynamics

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

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

Diversification Opportunities for Carl Zeiss and AngioDynamics

-0.09

Correlation Coefficient

Carl Zeiss  AngioDynamics

Good diversification

The 3 months correlation between Carl and AngioDynamics is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Carl Zeiss Meditec and AngioDynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngioDynamics and Carl Zeiss 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 Carl Zeiss Meditec are associated (or correlated) with AngioDynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngioDynamics has no effect on the direction of Carl Zeiss i.e., Carl Zeiss and AngioDynamics go up and down completely randomly.

Pair Corralation between Carl Zeiss and AngioDynamics

Assuming the 90 days horizon Carl Zeiss Meditec is expected to under-perform the AngioDynamics. But the pink sheet apears to be less risky and, when comparing its historical volatility, Carl Zeiss Meditec is 1.43 times less risky than AngioDynamics. The pink sheet trades about -0.05 of its potential returns per unit of risk. The AngioDynamics is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,271  in AngioDynamics on September 3, 2024 and sell it today you would lose (578.00) from holding AngioDynamics or give up 45.48% of portfolio value over 90 days.

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

Carl Zeiss Meditec  vs.  AngioDynamics

Carl Zeiss Meditec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carl Zeiss Meditec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

AngioDynamics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AngioDynamics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, AngioDynamics is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Carl Zeiss and AngioDynamics

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

The idea behind Carl Zeiss Meditec and AngioDynamics 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.