Correlation Between ViewRay and Zimmer Biomet

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

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

Diversification Opportunities for ViewRay and Zimmer Biomet

-0.42

Correlation Coefficient

ViewRay  Zimmer Biomet

Very good diversification

The 3 months correlation between ViewRay and Zimmer is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding ViewRay and Zimmer Biomet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zimmer Biomet Holdings and ViewRay 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 ViewRay are associated (or correlated) with Zimmer Biomet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zimmer Biomet Holdings has no effect on the direction of ViewRay i.e., ViewRay and Zimmer Biomet go up and down completely randomly.

Pair Corralation between ViewRay and Zimmer Biomet

If you would invest  10,573  in Zimmer Biomet Holdings on September 29, 2024 and sell it today you would earn a total of  152.00  from holding Zimmer Biomet Holdings or generate 1.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.79%
Values	Daily Returns

ViewRay  vs.  Zimmer Biomet Holdings

ViewRay

Risk-Adjusted Performance

0 of 100

Very Weak

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

Zimmer Biomet Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zimmer Biomet Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Zimmer Biomet is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ViewRay and Zimmer Biomet

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

The idea behind ViewRay and Zimmer Biomet Holdings 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 Global Correlations module to find global opportunities by holding instruments from different markets.