Correlation Between ICU Medical and OraSure Technologies
Can any of the company-specific risk be diversified away by investing in both ICU Medical and OraSure Technologies 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 OraSure Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICU Medical and OraSure Technologies, you can compare the effects of market volatilities on ICU Medical and OraSure Technologies 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 OraSure Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICU Medical and OraSure Technologies.
Diversification Opportunities for ICU Medical and OraSure Technologies
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ICU and OraSure is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ICU Medical and OraSure Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OraSure Technologies 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 OraSure Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OraSure Technologies has no effect on the direction of ICU Medical i.e., ICU Medical and OraSure Technologies go up and down completely randomly.
Pair Corralation between ICU Medical and OraSure Technologies
Given the investment horizon of 90 days ICU Medical is expected to under-perform the OraSure Technologies. But the stock apears to be less risky and, when comparing its historical volatility, ICU Medical is 1.26 times less risky than OraSure Technologies. The stock trades about -0.2 of its potential returns per unit of risk. The OraSure Technologies is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 385.00 in OraSure Technologies on September 22, 2024 and sell it today you would lose (21.00) from holding OraSure Technologies or give up 5.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICU Medical vs. OraSure Technologies
Performance |
| Timeline |
| ICU Medical |
| OraSure Technologies |
ICU Medical and OraSure Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICU Medical and OraSure Technologies
The main advantage of trading using opposite ICU Medical and OraSure Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICU Medical position performs unexpectedly, OraSure Technologies 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 OraSure Technologies will offset losses from the drop in OraSure Technologies' long position.| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
| OraSure Technologies vs. Akoya Biosciences | OraSure Technologies vs. AtriCure | OraSure Technologies vs. ICU Medical | OraSure Technologies vs. Haemonetics |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |