Correlation Between Orthopediatrics Corp and Cytosorbents Crp

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

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

Diversification Opportunities for Orthopediatrics Corp and Cytosorbents Crp

0.28

Correlation Coefficient

Orthopediatrics Corp  Cytosorbents Crp

Modest diversification

The 3 months correlation between Orthopediatrics and Cytosorbents is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Orthopediatrics Corp and Cytosorbents Crp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytosorbents Crp and Orthopediatrics Corp 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 Orthopediatrics Corp are associated (or correlated) with Cytosorbents Crp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytosorbents Crp has no effect on the direction of Orthopediatrics Corp i.e., Orthopediatrics Corp and Cytosorbents Crp go up and down completely randomly.

Pair Corralation between Orthopediatrics Corp and Cytosorbents Crp

Given the investment horizon of 90 days Orthopediatrics Corp is expected to under-perform the Cytosorbents Crp. But the stock apears to be less risky and, when comparing its historical volatility, Orthopediatrics Corp is 1.85 times less risky than Cytosorbents Crp. The stock trades about -0.13 of its potential returns per unit of risk. The Cytosorbents Crp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  106.00  in Cytosorbents Crp on September 12, 2024 and sell it today you would lose (18.00) from holding Cytosorbents Crp or give up 16.98% of portfolio value over 90 days.

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

Orthopediatrics Corp  vs.  Cytosorbents Crp

Orthopediatrics Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orthopediatrics Corp 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 fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cytosorbents Crp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cytosorbents Crp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Orthopediatrics Corp and Cytosorbents Crp

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

The idea behind Orthopediatrics Corp and Cytosorbents Crp 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.