Correlation Between ICU Medical and Nephros
Can any of the company-specific risk be diversified away by investing in both ICU Medical and Nephros 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 Nephros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICU Medical and Nephros, you can compare the effects of market volatilities on ICU Medical and Nephros 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 Nephros. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICU Medical and Nephros.
Diversification Opportunities for ICU Medical and Nephros
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ICU and Nephros is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ICU Medical and Nephros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nephros 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 Nephros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nephros has no effect on the direction of ICU Medical i.e., ICU Medical and Nephros go up and down completely randomly.
Pair Corralation between ICU Medical and Nephros
Given the investment horizon of 90 days ICU Medical is expected to generate 1.91 times less return on investment than Nephros. But when comparing it to its historical volatility, ICU Medical is 1.3 times less risky than Nephros. It trades about 0.01 of its potential returns per unit of risk. Nephros is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 155.00 in Nephros on August 28, 2024 and sell it today you would lose (1.00) from holding Nephros or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICU Medical vs. Nephros
Performance |
| Timeline |
| ICU Medical |
| Nephros |
ICU Medical and Nephros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICU Medical and Nephros
The main advantage of trading using opposite ICU Medical and Nephros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICU Medical position performs unexpectedly, Nephros 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 Nephros will offset losses from the drop in Nephros' long position.| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
| Nephros vs. Precision Optics, | Nephros vs. Repro Med Systems | Nephros vs. InfuSystems Holdings | Nephros vs. Utah Medical Products |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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