Correlation Between PEPTONIC MEDICAL and Zimmer Biomet

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

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

Diversification Opportunities for PEPTONIC MEDICAL and Zimmer Biomet

0.0

Correlation Coefficient

PEPTONIC MEDICAL  Zimmer Biomet

Pay attention - limited upside

The 3 months correlation between PEPTONIC and Zimmer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PEPTONIC MEDICAL and Zimmer Biomet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zimmer Biomet Holdings and PEPTONIC MEDICAL 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 PEPTONIC MEDICAL are associated (or correlated) with Zimmer Biomet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zimmer Biomet Holdings has no effect on the direction of PEPTONIC MEDICAL i.e., PEPTONIC MEDICAL and Zimmer Biomet go up and down completely randomly.

Pair Corralation between PEPTONIC MEDICAL and Zimmer Biomet

If you would invest  10,226  in Zimmer Biomet Holdings on December 21, 2024 and sell it today you would lose (31.00) from holding Zimmer Biomet Holdings or give up 0.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PEPTONIC MEDICAL  vs.  Zimmer Biomet Holdings

PEPTONIC MEDICAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days PEPTONIC MEDICAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PEPTONIC MEDICAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Zimmer Biomet Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zimmer Biomet Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Zimmer Biomet is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PEPTONIC MEDICAL and Zimmer Biomet

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

The idea behind PEPTONIC MEDICAL and Zimmer Biomet Holdings 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.