Correlation Between Beyond Air and SurModics

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

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

Diversification Opportunities for Beyond Air and SurModics

0.22

Correlation Coefficient

Beyond Air  SurModics

Modest diversification

The 3 months correlation between Beyond and SurModics is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Air and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics and Beyond Air 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 Beyond Air 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 Beyond Air i.e., Beyond Air and SurModics go up and down completely randomly.

Pair Corralation between Beyond Air and SurModics

Given the investment horizon of 90 days Beyond Air is expected to under-perform the SurModics. In addition to that, Beyond Air is 11.51 times more volatile than SurModics. It trades about -0.02 of its total potential returns per unit of risk. SurModics is currently generating about -0.08 per unit of volatility. If you would invest  4,224  in SurModics on October 7, 2024 and sell it today you would lose (272.00) from holding SurModics or give up 6.44% of portfolio value over 90 days.

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

Beyond Air  vs.  SurModics

Beyond Air

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beyond Air has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Beyond Air is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

SurModics

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SurModics are ranked lower than 7 (%) 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 Beyond Air and SurModics

The main advantage of trading using opposite Beyond Air and SurModics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Air 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 Beyond Air 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.