Correlation Between Carl Zeiss and ICU Medical
Can any of the company-specific risk be diversified away by investing in both Carl Zeiss and ICU Medical 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 Carl Zeiss and ICU Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carl Zeiss Meditec and ICU Medical, you can compare the effects of market volatilities on Carl Zeiss and ICU Medical 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 Carl Zeiss with a short position of ICU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carl Zeiss and ICU Medical.
Diversification Opportunities for Carl Zeiss and ICU Medical
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carl and ICU is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Carl Zeiss Meditec and ICU Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICU Medical and Carl Zeiss 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 Carl Zeiss Meditec are associated (or correlated) with ICU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICU Medical has no effect on the direction of Carl Zeiss i.e., Carl Zeiss and ICU Medical go up and down completely randomly.
Pair Corralation between Carl Zeiss and ICU Medical
Assuming the 90 days horizon Carl Zeiss Meditec is expected to generate 1.21 times more return on investment than ICU Medical. However, Carl Zeiss is 1.21 times more volatile than ICU Medical. It trades about -0.04 of its potential returns per unit of risk. ICU Medical is currently generating about -0.15 per unit of risk. If you would invest 6,171 in Carl Zeiss Meditec on September 4, 2024 and sell it today you would lose (162.00) from holding Carl Zeiss Meditec or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carl Zeiss Meditec vs. ICU Medical
Performance |
| Timeline |
| Carl Zeiss Meditec |
| ICU Medical |
Carl Zeiss and ICU Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carl Zeiss and ICU Medical
The main advantage of trading using opposite Carl Zeiss and ICU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carl Zeiss position performs unexpectedly, ICU Medical 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 ICU Medical will offset losses from the drop in ICU Medical's long position.| Carl Zeiss vs. CeCors Inc | Carl Zeiss vs. GlucoTrack | Carl Zeiss vs. Sharps Technology | Carl Zeiss vs. Wearable Health Solutions |
| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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