Correlation Between ICU Medical and NanoString Technologies

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

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

Diversification Opportunities for ICU Medical and NanoString Technologies

0.0

Correlation Coefficient

ICU Medical  NanoString Technologies

Pay attention - limited upside

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

Pair Corralation between ICU Medical and NanoString Technologies

If you would invest (100.00) in NanoString Technologies on December 29, 2024 and sell it today you would earn a total of  100.00  from holding NanoString Technologies or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ICU Medical  vs.  NanoString Technologies

ICU Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days ICU Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, ICU Medical is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

NanoString Technologies

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ICU Medical and NanoString Technologies

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

The idea behind ICU Medical and NanoString Technologies 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.