Correlation Between Biohaven Pharmaceutical and AtriCure
Can any of the company-specific risk be diversified away by investing in both Biohaven Pharmaceutical and AtriCure 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 Biohaven Pharmaceutical and AtriCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biohaven Pharmaceutical Holding and AtriCure, you can compare the effects of market volatilities on Biohaven Pharmaceutical and AtriCure 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 Biohaven Pharmaceutical with a short position of AtriCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biohaven Pharmaceutical and AtriCure.
Diversification Opportunities for Biohaven Pharmaceutical and AtriCure
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Biohaven and AtriCure is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Biohaven Pharmaceutical Holdin and AtriCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AtriCure and Biohaven Pharmaceutical 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 Biohaven Pharmaceutical Holding are associated (or correlated) with AtriCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AtriCure has no effect on the direction of Biohaven Pharmaceutical i.e., Biohaven Pharmaceutical and AtriCure go up and down completely randomly.
Pair Corralation between Biohaven Pharmaceutical and AtriCure
Given the investment horizon of 90 days Biohaven Pharmaceutical Holding is expected to generate 1.8 times more return on investment than AtriCure. However, Biohaven Pharmaceutical is 1.8 times more volatile than AtriCure. It trades about 0.1 of its potential returns per unit of risk. AtriCure is currently generating about 0.12 per unit of risk. If you would invest 1,369 in Biohaven Pharmaceutical Holding on July 24, 2025 and sell it today you would earn a total of 404.00 from holding Biohaven Pharmaceutical Holding or generate 29.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biohaven Pharmaceutical Holdin vs. AtriCure
Performance |
| Timeline |
| Biohaven Pharmaceutical |
| AtriCure |
Biohaven Pharmaceutical and AtriCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biohaven Pharmaceutical and AtriCure
The main advantage of trading using opposite Biohaven Pharmaceutical and AtriCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biohaven Pharmaceutical position performs unexpectedly, AtriCure 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 AtriCure will offset losses from the drop in AtriCure's long position.The idea behind Biohaven Pharmaceutical Holding and AtriCure 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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Check out your portfolio center.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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