Correlation Between SurModics and Owlet

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

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

Diversification Opportunities for SurModics and Owlet

-0.32

Correlation Coefficient

SurModics  Owlet

Very good diversification

The 3 months correlation between SurModics and Owlet is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SurModics and Owlet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owlet Inc 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 Owlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owlet Inc has no effect on the direction of SurModics i.e., SurModics and Owlet go up and down completely randomly.

Pair Corralation between SurModics and Owlet

Given the investment horizon of 90 days SurModics is expected to generate 13.66 times less return on investment than Owlet. But when comparing it to its historical volatility, SurModics is 7.05 times less risky than Owlet. It trades about 0.04 of its potential returns per unit of risk. Owlet Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  439.00  in Owlet Inc on September 14, 2024 and sell it today you would earn a total of  70.00  from holding Owlet Inc or generate 15.95% return on investment over 90 days.

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

SurModics  vs.  Owlet Inc

SurModics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SurModics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, SurModics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Owlet Inc

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Owlet Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating essential indicators, Owlet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SurModics and Owlet

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

The idea behind SurModics and Owlet Inc 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 CEOs Directory module to screen CEOs from public companies around the world.