Correlation Between Accuray Incorporated and SurModics

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

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

Diversification Opportunities for Accuray Incorporated and SurModics

0.52

Correlation Coefficient

Accuray Incorporated  SurModics

Very weak diversification

The 3 months correlation between Accuray and SurModics is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Accuray Incorporated and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics and Accuray Incorporated 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 Accuray Incorporated are associated (or correlated) with SurModics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SurModics has no effect on the direction of Accuray Incorporated i.e., Accuray Incorporated and SurModics go up and down completely randomly.

Pair Corralation between Accuray Incorporated and SurModics

Given the investment horizon of 90 days Accuray Incorporated is expected to generate 6.47 times more return on investment than SurModics. However, Accuray Incorporated is 6.47 times more volatile than SurModics. It trades about 0.02 of its potential returns per unit of risk. SurModics is currently generating about 0.02 per unit of risk. If you would invest  211.00  in Accuray Incorporated on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Accuray Incorporated or generate 0.0% return on investment over 90 days.

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

Accuray Incorporated  vs.  SurModics

Accuray Incorporated

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Accuray Incorporated are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Accuray Incorporated is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SurModics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SurModics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, SurModics is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Accuray Incorporated and SurModics

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

The idea behind Accuray Incorporated and SurModics 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.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.