Correlation Between SurModics and GelStat Corp

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

By analyzing existing cross correlation between SurModics and GelStat Corp, you can compare the effects of market volatilities on SurModics and GelStat Corp 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 GelStat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of SurModics and GelStat Corp.

Diversification Opportunities for SurModics and GelStat Corp

0.04

Correlation Coefficient

SurModics  GelStat Corp

Significant diversification

The 3 months correlation between SurModics and GelStat is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding SurModics and GelStat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GelStat Corp 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 GelStat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GelStat Corp has no effect on the direction of SurModics i.e., SurModics and GelStat Corp go up and down completely randomly.

Pair Corralation between SurModics and GelStat Corp

Given the investment horizon of 90 days SurModics is expected to generate 7.37 times less return on investment than GelStat Corp. But when comparing it to its historical volatility, SurModics is 6.1 times less risky than GelStat Corp. It trades about 0.06 of its potential returns per unit of risk. GelStat Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.08  in GelStat Corp on December 1, 2024 and sell it today you would lose (0.05) from holding GelStat Corp or give up 62.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

SurModics  vs.  GelStat Corp

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.

GelStat Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days GelStat Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with SurModics and GelStat Corp

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

The idea behind SurModics and GelStat Corp 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 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.