Correlation Between ICU Medical and Centessa Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both ICU Medical and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICU Medical and Centessa Pharmaceuticals PLC, you can compare the effects of market volatilities on ICU Medical and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICU Medical and Centessa Pharmaceuticals.
Diversification Opportunities for ICU Medical and Centessa Pharmaceuticals
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ICU and Centessa is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding ICU Medical and Centessa Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centessa Pharmaceuticals has no effect on the direction of ICU Medical i.e., ICU Medical and Centessa Pharmaceuticals go up and down completely randomly.
Pair Corralation between ICU Medical and Centessa Pharmaceuticals
Given the investment horizon of 90 days ICU Medical is expected to generate 1.2 times less return on investment than Centessa Pharmaceuticals. But when comparing it to its historical volatility, ICU Medical is 1.45 times less risky than Centessa Pharmaceuticals. It trades about 0.11 of its potential returns per unit of risk. Centessa Pharmaceuticals PLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,089 in Centessa Pharmaceuticals PLC on September 1, 2024 and sell it today you would earn a total of 702.00 from holding Centessa Pharmaceuticals PLC or generate 64.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICU Medical vs. Centessa Pharmaceuticals PLC
Performance |
| Timeline |
| ICU Medical |
| Centessa Pharmaceuticals |
ICU Medical and Centessa Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICU Medical and Centessa Pharmaceuticals
The main advantage of trading using opposite ICU Medical and Centessa Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICU Medical position performs unexpectedly, Centessa Pharmaceuticals 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 Centessa Pharmaceuticals will offset losses from the drop in Centessa Pharmaceuticals' long position.| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
| Centessa Pharmaceuticals vs. Tff Pharmaceuticals | Centessa Pharmaceuticals vs. Eliem Therapeutics | Centessa Pharmaceuticals vs. Inhibrx | Centessa Pharmaceuticals vs. Enliven Therapeutics |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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