Correlation Between Integer Holdings and CochLear

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

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

Diversification Opportunities for Integer Holdings and CochLear

0.19

Correlation Coefficient

Integer Holdings  CochLear

Average diversification

The 3 months correlation between Integer and CochLear is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Integer Holdings Corp and CochLear Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CochLear ADR and Integer Holdings 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 Integer Holdings Corp are associated (or correlated) with CochLear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CochLear ADR has no effect on the direction of Integer Holdings i.e., Integer Holdings and CochLear go up and down completely randomly.

Pair Corralation between Integer Holdings and CochLear

Given the investment horizon of 90 days Integer Holdings Corp is expected to generate 1.13 times more return on investment than CochLear. However, Integer Holdings is 1.13 times more volatile than CochLear Ltd ADR. It trades about 0.11 of its potential returns per unit of risk. CochLear Ltd ADR is currently generating about 0.02 per unit of risk. If you would invest  12,687  in Integer Holdings Corp on August 31, 2024 and sell it today you would earn a total of  1,393  from holding Integer Holdings Corp or generate 10.98% return on investment over 90 days.

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

Integer Holdings Corp  vs.  CochLear Ltd ADR

Integer Holdings Corp

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Integer Holdings Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, Integer Holdings may actually be approaching a critical reversion point that can send shares even higher in December 2024.

CochLear ADR

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Integer Holdings and CochLear

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

The idea behind Integer Holdings Corp and CochLear Ltd ADR 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.