Correlation Between Bioventus and SurModics

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

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

Diversification Opportunities for Bioventus and SurModics

-0.63

Correlation Coefficient

Bioventus  SurModics

Excellent diversification

The 3 months correlation between Bioventus and SurModics is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bioventus and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics and Bioventus 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 Bioventus 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 Bioventus i.e., Bioventus and SurModics go up and down completely randomly.

Pair Corralation between Bioventus and SurModics

Considering the 90-day investment horizon Bioventus is expected to generate 5.61 times more return on investment than SurModics. However, Bioventus is 5.61 times more volatile than SurModics. It trades about 0.11 of its potential returns per unit of risk. SurModics is currently generating about 0.02 per unit of risk. If you would invest  999.00  in Bioventus on September 2, 2024 and sell it today you would earn a total of  230.00  from holding Bioventus or generate 23.02% return on investment over 90 days.

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

Bioventus  vs.  SurModics

Bioventus

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bioventus are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bioventus unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bioventus and SurModics

The main advantage of trading using opposite Bioventus and SurModics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bioventus 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 Bioventus 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.

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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 Stocks Directory module to find actively traded stocks across global markets.