Correlation Between Catheter Precision and Abbott Laboratories

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

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

Diversification Opportunities for Catheter Precision and Abbott Laboratories

-0.17

Correlation Coefficient

Catheter Precision  Abbott Laboratories

Good diversification

The 3 months correlation between Catheter and Abbott is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Catheter Precision and Abbott Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbott Laboratories and Catheter Precision 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 Catheter Precision are associated (or correlated) with Abbott Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbott Laboratories has no effect on the direction of Catheter Precision i.e., Catheter Precision and Abbott Laboratories go up and down completely randomly.

Pair Corralation between Catheter Precision and Abbott Laboratories

Given the investment horizon of 90 days Catheter Precision is expected to under-perform the Abbott Laboratories. In addition to that, Catheter Precision is 3.72 times more volatile than Abbott Laboratories. It trades about -0.17 of its total potential returns per unit of risk. Abbott Laboratories is currently generating about 0.15 per unit of volatility. If you would invest  11,445  in Abbott Laboratories on August 31, 2024 and sell it today you would earn a total of  450.00  from holding Abbott Laboratories or generate 3.93% return on investment over 90 days.

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

Catheter Precision  vs.  Abbott Laboratories

Catheter Precision

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Catheter Precision are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Catheter Precision disclosed solid returns over the last few months and may actually be approaching a breakup point.

Abbott Laboratories

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Abbott Laboratories are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, Abbott Laboratories is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Catheter Precision and Abbott Laboratories

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

The idea behind Catheter Precision and Abbott Laboratories 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.