Correlation Between Surgical Science and First

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Can any of the company-specific risk be diversified away by investing in both Surgical Science and First 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 Surgical Science and First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surgical Science Sweden and First Class Metals, you can compare the effects of market volatilities on Surgical Science and First 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 Surgical Science with a short position of First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surgical Science and First.

Diversification Opportunities for Surgical Science and First

SurgicalFirstDiversified AwaySurgicalFirstDiversified Away100%
-0.68
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Surgical and First is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Surgical Science Sweden and First Class Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Class Metals and Surgical Science 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 Surgical Science Sweden are associated (or correlated) with First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Class Metals has no effect on the direction of Surgical Science i.e., Surgical Science and First go up and down completely randomly.

Pair Corralation between Surgical Science and First

Assuming the 90 days trading horizon Surgical Science Sweden is expected to generate 0.72 times more return on investment than First. However, Surgical Science Sweden is 1.39 times less risky than First. It trades about 0.01 of its potential returns per unit of risk. First Class Metals is currently generating about -0.06 per unit of risk. If you would invest  17,168  in Surgical Science Sweden on November 27, 2024 and sell it today you would lose (1,028) from holding Surgical Science Sweden or give up 5.99% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy98.81%
ValuesDaily Returns

Surgical Science Sweden  vs.  First Class Metals

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-100102030
JavaScript chart by amCharts 3.21.150AAU FCM
       Timeline  
Surgical Science Sweden 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Surgical Science Sweden are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Surgical Science may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb145150155160165170175180185190
First Class Metals 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in First Class Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, First is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.61.822.22.42.6

Surgical Science and First Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.63-7.96-5.29-2.62-0.04452.665.428.1810.9313.69 0.0150.0200.0250.0300.035
JavaScript chart by amCharts 3.21.150AAU FCM
       Returns  

Pair Trading with Surgical Science and First

The main advantage of trading using opposite Surgical Science and First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surgical Science position performs unexpectedly, First 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 First will offset losses from the drop in First's long position.
The idea behind Surgical Science Sweden and First Class Metals 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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