Correlation Between SurModics and Anika Therapeutics

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

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

Diversification Opportunities for SurModics and Anika Therapeutics

0.07

Correlation Coefficient

SurModics  Anika Therapeutics

Significant diversification

The 3 months correlation between SurModics and Anika is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SurModics and Anika Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anika Therapeutics and SurModics 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 SurModics are associated (or correlated) with Anika Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anika Therapeutics has no effect on the direction of SurModics i.e., SurModics and Anika Therapeutics go up and down completely randomly.

Pair Corralation between SurModics and Anika Therapeutics

Given the investment horizon of 90 days SurModics is expected to under-perform the Anika Therapeutics. In addition to that, SurModics is 1.11 times more volatile than Anika Therapeutics. It trades about -0.16 of its total potential returns per unit of risk. Anika Therapeutics is currently generating about -0.05 per unit of volatility. If you would invest  1,625  in Anika Therapeutics on December 29, 2024 and sell it today you would lose (114.00) from holding Anika Therapeutics or give up 7.02% of portfolio value over 90 days.

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

SurModics  vs.  Anika Therapeutics

SurModics

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Anika Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Anika Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Anika Therapeutics is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with SurModics and Anika Therapeutics

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

The idea behind SurModics and Anika Therapeutics 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.