Correlation Between Cutera and SurModics
Can any of the company-specific risk be diversified away by investing in both Cutera 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 Cutera and SurModics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cutera Inc and SurModics, you can compare the effects of market volatilities on Cutera 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 Cutera with a short position of SurModics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cutera and SurModics.
Diversification Opportunities for Cutera and SurModics
Modest diversification
The 3 months correlation between Cutera and SurModics is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cutera Inc and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics and Cutera 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 Cutera Inc 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 Cutera i.e., Cutera and SurModics go up and down completely randomly.
Pair Corralation between Cutera and SurModics
Given the investment horizon of 90 days Cutera Inc is expected to under-perform the SurModics. In addition to that, Cutera is 2.31 times more volatile than SurModics. It trades about -0.09 of its total potential returns per unit of risk. SurModics is currently generating about 0.02 per unit of volatility. If you would invest 3,584 in SurModics on August 28, 2024 and sell it today you would earn a total of 372.00 from holding SurModics or generate 10.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cutera Inc vs. SurModics
Performance |
| Timeline |
| Cutera Inc |
| SurModics |
Cutera and SurModics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cutera and SurModics
The main advantage of trading using opposite Cutera and SurModics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cutera 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 Cutera Inc 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.| SurModics vs. LivaNova PLC | SurModics vs. Electromed | SurModics vs. Orthopediatrics Corp | SurModics vs. Neuropace |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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