Correlation Between ICU Medical and Virco Manufacturing
Can any of the company-specific risk be diversified away by investing in both ICU Medical and Virco Manufacturing 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 Virco Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICU Medical and Virco Manufacturing, you can compare the effects of market volatilities on ICU Medical and Virco Manufacturing 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 Virco Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICU Medical and Virco Manufacturing.
Diversification Opportunities for ICU Medical and Virco Manufacturing
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between ICU and Virco is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ICU Medical and Virco Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virco Manufacturing 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 Virco Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virco Manufacturing has no effect on the direction of ICU Medical i.e., ICU Medical and Virco Manufacturing go up and down completely randomly.
Pair Corralation between ICU Medical and Virco Manufacturing
Given the investment horizon of 90 days ICU Medical is expected to generate 0.68 times more return on investment than Virco Manufacturing. However, ICU Medical is 1.48 times less risky than Virco Manufacturing. It trades about -0.21 of its potential returns per unit of risk. Virco Manufacturing is currently generating about -0.14 per unit of risk. If you would invest 17,228 in ICU Medical on November 27, 2024 and sell it today you would lose (1,203) from holding ICU Medical or give up 6.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICU Medical vs. Virco Manufacturing
Performance |
| Timeline |
| ICU Medical |
| Virco Manufacturing |
ICU Medical and Virco Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICU Medical and Virco Manufacturing
The main advantage of trading using opposite ICU Medical and Virco Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICU Medical position performs unexpectedly, Virco Manufacturing 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 Virco Manufacturing will offset losses from the drop in Virco Manufacturing's long position.| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
| Virco Manufacturing vs. Bassett Furniture Industries | Virco Manufacturing vs. Hooker Furniture | Virco Manufacturing vs. Natuzzi SpA | Virco Manufacturing vs. Flexsteel Industries |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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