Correlation Between SurModics and Tenon Medical

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

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

Diversification Opportunities for SurModics and Tenon Medical

0.11

Correlation Coefficient

SurModics  Tenon Medical

Average diversification

The 3 months correlation between SurModics and Tenon is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SurModics and Tenon Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenon Medical 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 Tenon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenon Medical has no effect on the direction of SurModics i.e., SurModics and Tenon Medical go up and down completely randomly.

Pair Corralation between SurModics and Tenon Medical

Given the investment horizon of 90 days SurModics is expected to generate 4.1 times less return on investment than Tenon Medical. But when comparing it to its historical volatility, SurModics is 22.23 times less risky than Tenon Medical. It trades about 0.02 of its potential returns per unit of risk. Tenon Medical is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  385.00  in Tenon Medical on September 3, 2024 and sell it today you would lose (156.00) from holding Tenon Medical or give up 40.52% of portfolio value over 90 days.

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

SurModics  vs.  Tenon Medical

SurModics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SurModics are ranked lower than 1 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Tenon Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tenon Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Tenon Medical is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SurModics and Tenon Medical

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

The idea behind SurModics and Tenon Medical 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.