Correlation Between Catheter Precision and Amedisys

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

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

Diversification Opportunities for Catheter Precision and Amedisys

0.69

Correlation Coefficient

Catheter Precision  Amedisys

Poor diversification

The 3 months correlation between Catheter and Amedisys is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Catheter Precision and Amedisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedisys 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 Amedisys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedisys has no effect on the direction of Catheter Precision i.e., Catheter Precision and Amedisys go up and down completely randomly.

Pair Corralation between Catheter Precision and Amedisys

Given the investment horizon of 90 days Catheter Precision is expected to generate 20.88 times more return on investment than Amedisys. However, Catheter Precision is 20.88 times more volatile than Amedisys. It trades about 0.03 of its potential returns per unit of risk. Amedisys is currently generating about -0.09 per unit of risk. If you would invest  44.00  in Catheter Precision on July 19, 2024 and sell it today you would earn a total of  0.00  from holding Catheter Precision or generate 0.0% return on investment over 90 days.

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

Catheter Precision  vs.  Amedisys

Catheter Precision

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catheter Precision has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in November 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amedisys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amedisys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Amedisys is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Catheter Precision and Amedisys

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

The idea behind Catheter Precision and Amedisys 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.