Correlation Between Glaukos Corp and Zimmer Biomet

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

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

Diversification Opportunities for Glaukos Corp and Zimmer Biomet

-0.29

Correlation Coefficient

Glaukos Corp  Zimmer Biomet

Very good diversification

The 3 months correlation between Glaukos and Zimmer is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Glaukos Corp 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 Glaukos Corp 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 Glaukos Corp 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 Glaukos Corp i.e., Glaukos Corp and Zimmer Biomet go up and down completely randomly.

Pair Corralation between Glaukos Corp and Zimmer Biomet

Given the investment horizon of 90 days Glaukos Corp is expected to under-perform the Zimmer Biomet. In addition to that, Glaukos Corp is 2.56 times more volatile than Zimmer Biomet Holdings. It trades about -0.14 of its total potential returns per unit of risk. Zimmer Biomet Holdings is currently generating about 0.08 per unit of volatility. If you would invest  10,540  in Zimmer Biomet Holdings on December 28, 2024 and sell it today you would earn a total of  686.00  from holding Zimmer Biomet Holdings or generate 6.51% return on investment over 90 days.

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

Glaukos Corp  vs.  Zimmer Biomet Holdings

Glaukos Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Glaukos Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Zimmer Biomet Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zimmer Biomet Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental drivers, Zimmer Biomet may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Glaukos Corp and Zimmer Biomet

The main advantage of trading using opposite Glaukos Corp and Zimmer Biomet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glaukos Corp 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 Glaukos Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.