Correlation Between ICU Medical and Sanara Medtech
Can any of the company-specific risk be diversified away by investing in both ICU Medical and Sanara Medtech 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 Sanara Medtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICU Medical and Sanara Medtech, you can compare the effects of market volatilities on ICU Medical and Sanara Medtech 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 Sanara Medtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICU Medical and Sanara Medtech.
Diversification Opportunities for ICU Medical and Sanara Medtech
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ICU and Sanara is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ICU Medical and Sanara Medtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanara Medtech 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 Sanara Medtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanara Medtech has no effect on the direction of ICU Medical i.e., ICU Medical and Sanara Medtech go up and down completely randomly.
Pair Corralation between ICU Medical and Sanara Medtech
Given the investment horizon of 90 days ICU Medical is expected to under-perform the Sanara Medtech. But the stock apears to be less risky and, when comparing its historical volatility, ICU Medical is 1.41 times less risky than Sanara Medtech. The stock trades about -0.21 of its potential returns per unit of risk. The Sanara Medtech is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,345 in Sanara Medtech on September 5, 2024 and sell it today you would earn a total of 291.00 from holding Sanara Medtech or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICU Medical vs. Sanara Medtech
Performance |
| Timeline |
| ICU Medical |
| Sanara Medtech |
ICU Medical and Sanara Medtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICU Medical and Sanara Medtech
The main advantage of trading using opposite ICU Medical and Sanara Medtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICU Medical position performs unexpectedly, Sanara Medtech 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 Sanara Medtech will offset losses from the drop in Sanara Medtech's long position.| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
| Sanara Medtech vs. Baxter International | Sanara Medtech vs. West Pharmaceutical Services | Sanara Medtech vs. ResMed Inc | Sanara Medtech 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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