Correlation Between Stryker and Hyperfine

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

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

Diversification Opportunities for Stryker and Hyperfine

0.49

Correlation Coefficient

Stryker  Hyperfine

Very weak diversification

The 3 months correlation between Stryker and Hyperfine is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Stryker and Hyperfine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyperfine and Stryker 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 Stryker are associated (or correlated) with Hyperfine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyperfine has no effect on the direction of Stryker i.e., Stryker and Hyperfine go up and down completely randomly.

Pair Corralation between Stryker and Hyperfine

Considering the 90-day investment horizon Stryker is expected to generate 4.75 times less return on investment than Hyperfine. But when comparing it to its historical volatility, Stryker is 7.29 times less risky than Hyperfine. It trades about 0.02 of its potential returns per unit of risk. Hyperfine is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  88.00  in Hyperfine on December 30, 2024 and sell it today you would lose (16.00) from holding Hyperfine or give up 18.18% of portfolio value over 90 days.

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

Stryker  vs.  Hyperfine

Stryker

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stryker are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Stryker is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Hyperfine

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hyperfine has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Hyperfine may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Stryker and Hyperfine

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

The idea behind Stryker and Hyperfine 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.