Correlation Between LeMaitre Vascular and AngioDynamics

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

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

Diversification Opportunities for LeMaitre Vascular and AngioDynamics

0.25

Correlation Coefficient

LeMaitre Vascular  AngioDynamics

Modest diversification

The 3 months correlation between LeMaitre and AngioDynamics is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding LeMaitre Vascular and AngioDynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngioDynamics and LeMaitre Vascular 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 LeMaitre Vascular 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 LeMaitre Vascular i.e., LeMaitre Vascular and AngioDynamics go up and down completely randomly.

Pair Corralation between LeMaitre Vascular and AngioDynamics

Given the investment horizon of 90 days LeMaitre Vascular is expected to generate 1.3 times less return on investment than AngioDynamics. But when comparing it to its historical volatility, LeMaitre Vascular is 1.6 times less risky than AngioDynamics. It trades about 0.12 of its potential returns per unit of risk. AngioDynamics is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  541.00  in AngioDynamics on March 14, 2024 and sell it today you would earn a total of  99.00  from holding AngioDynamics or generate 18.3% return on investment over 90 days.

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

LeMaitre Vascular  vs.  AngioDynamics

LeMaitre Vascular

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LeMaitre Vascular are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, LeMaitre Vascular unveiled solid returns over the last few months and may actually be approaching a breakup point.

AngioDynamics

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AngioDynamics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, AngioDynamics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LeMaitre Vascular and AngioDynamics

The main advantage of trading using opposite LeMaitre Vascular and AngioDynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LeMaitre Vascular 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 LeMaitre Vascular 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.