Correlation Between Baxter International and Sanara Medtech
Can any of the company-specific risk be diversified away by investing in both Baxter International and Sanara Medtech 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 Baxter International and Sanara Medtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baxter International and Sanara Medtech, you can compare the effects of market volatilities on Baxter International and Sanara Medtech 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 Baxter International with a short position of Sanara Medtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baxter International and Sanara Medtech.
Diversification Opportunities for Baxter International and Sanara Medtech
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baxter and Sanara is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Baxter International and Sanara Medtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanara Medtech and Baxter International 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 Baxter International are associated (or correlated) with Sanara Medtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanara Medtech has no effect on the direction of Baxter International i.e., Baxter International and Sanara Medtech go up and down completely randomly.
Pair Corralation between Baxter International and Sanara Medtech
Considering the 90-day investment horizon Baxter International is expected to under-perform the Sanara Medtech. But the stock apears to be less risky and, when comparing its historical volatility, Baxter International is 1.76 times less risky than Sanara Medtech. The stock trades about -0.03 of its potential returns per unit of risk. The Sanara Medtech is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,704 in Sanara Medtech on September 5, 2024 and sell it today you would lose (68.00) from holding Sanara Medtech or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baxter International vs. Sanara Medtech
Performance |
| Timeline |
| Baxter International |
| Sanara Medtech |
Baxter International and Sanara Medtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baxter International and Sanara Medtech
The main advantage of trading using opposite Baxter International and Sanara Medtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baxter International position performs unexpectedly, Sanara Medtech 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 Sanara Medtech will offset losses from the drop in Sanara Medtech's long position.| Baxter International vs. Embecta Corp | Baxter International vs. West Pharmaceutical Services | Baxter International vs. ResMed Inc | Baxter International vs. The Cooper Companies, |
| Sanara Medtech vs. Baxter International | Sanara Medtech vs. West Pharmaceutical Services | Sanara Medtech vs. ResMed Inc | Sanara Medtech vs. ICU Medical |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |