Correlation Between Surgalign Holdings and SurModics

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

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

Diversification Opportunities for Surgalign Holdings and SurModics

0.15

Correlation Coefficient

Surgalign Holdings  SurModics

Average diversification

The 3 months correlation between Surgalign and SurModics is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Surgalign Holdings and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics and Surgalign Holdings 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 Surgalign Holdings 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 Surgalign Holdings i.e., Surgalign Holdings and SurModics go up and down completely randomly.

Pair Corralation between Surgalign Holdings and SurModics

If you would invest  3,922  in SurModics on September 3, 2024 and sell it today you would earn a total of  23.00  from holding SurModics or generate 0.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Surgalign Holdings  vs.  SurModics

Surgalign Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Surgalign Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Surgalign Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Surgalign Holdings and SurModics

The main advantage of trading using opposite Surgalign Holdings and SurModics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surgalign Holdings 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 Surgalign Holdings 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.