Correlation Between Iradimed and Apyx Medical

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

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

Diversification Opportunities for Iradimed and Apyx Medical

0.56

Correlation Coefficient

Iradimed  Apyx Medical

Very weak diversification

The 3 months correlation between Iradimed and Apyx is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Iradimed Co and Apyx Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apyx Medical and Iradimed 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 Iradimed Co are associated (or correlated) with Apyx Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apyx Medical has no effect on the direction of Iradimed i.e., Iradimed and Apyx Medical go up and down completely randomly.

Pair Corralation between Iradimed and Apyx Medical

Given the investment horizon of 90 days Iradimed Co is expected to under-perform the Apyx Medical. But the stock apears to be less risky and, when comparing its historical volatility, Iradimed Co is 3.26 times less risky than Apyx Medical. The stock trades about -0.13 of its potential returns per unit of risk. The Apyx Medical is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  137.00  in Apyx Medical on January 31, 2024 and sell it today you would earn a total of  3.00  from holding Apyx Medical or generate 2.19% return on investment over 90 days.

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

Iradimed Co  vs.  Apyx Medical

Iradimed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Apyx Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apyx Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Iradimed and Apyx Medical

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

The idea behind Iradimed Co and Apyx Medical 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.