Correlation Between Integra LifeSciences and Penumbra
Can any of the company-specific risk be diversified away by investing in both Integra LifeSciences and Penumbra 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 Integra LifeSciences and Penumbra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integra LifeSciences Holdings and Penumbra, you can compare the effects of market volatilities on Integra LifeSciences and Penumbra 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 Integra LifeSciences with a short position of Penumbra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra LifeSciences and Penumbra.
Diversification Opportunities for Integra LifeSciences and Penumbra
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Integra and Penumbra is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Integra LifeSciences Holdings and Penumbra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penumbra and Integra LifeSciences 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 Integra LifeSciences Holdings are associated (or correlated) with Penumbra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penumbra has no effect on the direction of Integra LifeSciences i.e., Integra LifeSciences and Penumbra go up and down completely randomly.
Pair Corralation between Integra LifeSciences and Penumbra
Given the investment horizon of 90 days Integra LifeSciences Holdings is expected to under-perform the Penumbra. In addition to that, Integra LifeSciences is 1.16 times more volatile than Penumbra. It trades about -0.04 of its total potential returns per unit of risk. Penumbra is currently generating about 0.02 per unit of volatility. If you would invest 22,000 in Penumbra on August 28, 2024 and sell it today you would earn a total of 2,468 from holding Penumbra or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integra LifeSciences Holdings vs. Penumbra
Performance |
| Timeline |
| Integra LifeSciences |
| Penumbra |
Integra LifeSciences and Penumbra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integra LifeSciences and Penumbra
The main advantage of trading using opposite Integra LifeSciences and Penumbra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integra LifeSciences position performs unexpectedly, Penumbra 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 Penumbra will offset losses from the drop in Penumbra's long position.| Integra LifeSciences vs. ICU Medical | Integra LifeSciences vs. CONMED | Integra LifeSciences vs. Haemonetics | Integra LifeSciences vs. Merit Medical Systems |
| Penumbra vs. Insulet | Penumbra vs. TransMedics Group | Penumbra vs. Masimo | Penumbra vs. Inspire Medical Systems |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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