Correlation Between ICU Medical and SurModics

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

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

Diversification Opportunities for ICU Medical and SurModics

-0.44

Correlation Coefficient

ICU Medical  SurModics

Very good diversification

The 3 months correlation between ICU and SurModics is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ICU Medical and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics 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 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 ICU Medical i.e., ICU Medical and SurModics go up and down completely randomly.

Pair Corralation between ICU Medical and SurModics

Given the investment horizon of 90 days ICU Medical is expected to under-perform the SurModics. In addition to that, ICU Medical is 2.7 times more volatile than SurModics. It trades about -0.22 of its total potential returns per unit of risk. SurModics is currently generating about 0.34 per unit of volatility. If you would invest  3,751  in SurModics on August 30, 2024 and sell it today you would earn a total of  203.00  from holding SurModics or generate 5.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

ICU Medical  vs.  SurModics

ICU Medical

Risk-Adjusted Performance

0 of 100

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 newest stock price confusion, may contribute to short-horizon losses for the traders.

SurModics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SurModics has generated negative risk-adjusted returns adding no value to investors with long positions. 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 ICU Medical and SurModics

The main advantage of trading using opposite ICU Medical and SurModics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICU Medical 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 ICU Medical 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.