Correlation Between Tela Bio and SurModics

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

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

Diversification Opportunities for Tela Bio and SurModics

0.67

Correlation Coefficient

Tela Bio  SurModics

Poor diversification

The 3 months correlation between Tela and SurModics is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Tela Bio and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics and Tela Bio 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 Tela Bio 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 Tela Bio i.e., Tela Bio and SurModics go up and down completely randomly.

Pair Corralation between Tela Bio and SurModics

Given the investment horizon of 90 days Tela Bio is expected to under-perform the SurModics. In addition to that, Tela Bio is 2.43 times more volatile than SurModics. It trades about -0.21 of its total potential returns per unit of risk. SurModics is currently generating about -0.17 per unit of volatility. If you would invest  3,963  in SurModics on December 29, 2024 and sell it today you would lose (902.00) from holding SurModics or give up 22.76% of portfolio value over 90 days.

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

Tela Bio  vs.  SurModics

Tela Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tela Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain somewhat 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.

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.

Pair Trading with Tela Bio and SurModics

The main advantage of trading using opposite Tela Bio and SurModics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tela Bio 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 Tela Bio 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.