Correlation Between CONMED and ZimVie
Can any of the company-specific risk be diversified away by investing in both CONMED and ZimVie 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 CONMED and ZimVie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONMED and ZimVie Inc, you can compare the effects of market volatilities on CONMED and ZimVie 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 CONMED with a short position of ZimVie. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONMED and ZimVie.
Diversification Opportunities for CONMED and ZimVie
Weak diversification
The 3 months correlation between CONMED and ZimVie is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CONMED and ZimVie Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZimVie Inc and CONMED 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 CONMED are associated (or correlated) with ZimVie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZimVie Inc has no effect on the direction of CONMED i.e., CONMED and ZimVie go up and down completely randomly.
Pair Corralation between CONMED and ZimVie
Given the investment horizon of 90 days CONMED is expected to under-perform the ZimVie. But the stock apears to be less risky and, when comparing its historical volatility, CONMED is 2.05 times less risky than ZimVie. The stock trades about -0.01 of its potential returns per unit of risk. The ZimVie Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,004 in ZimVie Inc on November 1, 2024 and sell it today you would earn a total of 442.00 from holding ZimVie Inc or generate 44.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CONMED vs. ZimVie Inc
Performance |
| Timeline |
| CONMED |
| ZimVie Inc |
CONMED and ZimVie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONMED and ZimVie
The main advantage of trading using opposite CONMED and ZimVie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONMED position performs unexpectedly, ZimVie 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 ZimVie will offset losses from the drop in ZimVie's long position.The idea behind CONMED and ZimVie Inc 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.| ZimVie vs. Stryker | ZimVie vs. Boston Scientific Corp | ZimVie vs. STERIS plc | ZimVie vs. Smith Nephew SNATS |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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