Correlation Between ICU Medical and ATI Physical
Can any of the company-specific risk be diversified away by investing in both ICU Medical and ATI Physical 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 ICU Medical and ATI Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICU Medical and ATI Physical Therapy, you can compare the effects of market volatilities on ICU Medical and ATI Physical 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 ICU Medical with a short position of ATI Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICU Medical and ATI Physical.
Diversification Opportunities for ICU Medical and ATI Physical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICU and ATI is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ICU Medical and ATI Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATI Physical Therapy and ICU Medical 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 ICU Medical are associated (or correlated) with ATI Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATI Physical Therapy has no effect on the direction of ICU Medical i.e., ICU Medical and ATI Physical go up and down completely randomly.
Pair Corralation between ICU Medical and ATI Physical
Given the investment horizon of 90 days ICU Medical is expected to generate 0.14 times more return on investment than ATI Physical. However, ICU Medical is 7.2 times less risky than ATI Physical. It trades about -0.16 of its potential returns per unit of risk. ATI Physical Therapy is currently generating about -0.32 per unit of risk. If you would invest 17,720 in ICU Medical on September 5, 2024 and sell it today you would lose (2,057) from holding ICU Medical or give up 11.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICU Medical vs. ATI Physical Therapy
Performance |
| Timeline |
| ICU Medical |
| ATI Physical Therapy |
ICU Medical and ATI Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICU Medical and ATI Physical
The main advantage of trading using opposite ICU Medical and ATI Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICU Medical position performs unexpectedly, ATI Physical 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 ATI Physical will offset losses from the drop in ATI Physical's long position.| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
| ATI Physical vs. Baxter International | ATI Physical vs. West Pharmaceutical Services | ATI Physical vs. ResMed Inc | ATI Physical 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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