Correlation Between PAVmed Series and SurModics

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

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

Diversification Opportunities for PAVmed Series and SurModics

-0.03

Correlation Coefficient

PAVmed Series  SurModics

Good diversification

The 3 months correlation between PAVmed and SurModics is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PAVmed Series Z and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics and PAVmed Series 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 PAVmed Series Z 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 PAVmed Series i.e., PAVmed Series and SurModics go up and down completely randomly.

Pair Corralation between PAVmed Series and SurModics

Assuming the 90 days horizon PAVmed Series Z is expected to generate 10.11 times more return on investment than SurModics. However, PAVmed Series is 10.11 times more volatile than SurModics. It trades about 0.16 of its potential returns per unit of risk. SurModics is currently generating about -0.18 per unit of risk. If you would invest  0.93  in PAVmed Series Z on October 22, 2024 and sell it today you would earn a total of  0.30  from holding PAVmed Series Z or generate 32.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

PAVmed Series Z  vs.  SurModics

PAVmed Series Z

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PAVmed Series Z are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, PAVmed Series showed solid returns over the last few months and may actually be approaching a breakup point.

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 PAVmed Series and SurModics

The main advantage of trading using opposite PAVmed Series and SurModics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAVmed Series 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 PAVmed Series Z 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.