Correlation Between ICU Medical and Viemed Healthcare
Can any of the company-specific risk be diversified away by investing in both ICU Medical and Viemed Healthcare 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 Viemed Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICU Medical and Viemed Healthcare, you can compare the effects of market volatilities on ICU Medical and Viemed Healthcare 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 Viemed Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICU Medical and Viemed Healthcare.
Diversification Opportunities for ICU Medical and Viemed Healthcare
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between ICU and Viemed is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding ICU Medical and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare 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 Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of ICU Medical i.e., ICU Medical and Viemed Healthcare go up and down completely randomly.
Pair Corralation between ICU Medical and Viemed Healthcare
Given the investment horizon of 90 days ICU Medical is expected to under-perform the Viemed Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, ICU Medical is 1.18 times less risky than Viemed Healthcare. The stock trades about -0.21 of its potential returns per unit of risk. The Viemed Healthcare is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 853.00 in Viemed Healthcare on September 5, 2024 and sell it today you would earn a total of 17.00 from holding Viemed Healthcare or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICU Medical vs. Viemed Healthcare
Performance |
| Timeline |
| ICU Medical |
| Viemed Healthcare |
ICU Medical and Viemed Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICU Medical and Viemed Healthcare
The main advantage of trading using opposite ICU Medical and Viemed Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICU Medical position performs unexpectedly, Viemed Healthcare 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 Viemed Healthcare will offset losses from the drop in Viemed Healthcare's long position.| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
| Viemed Healthcare vs. Baxter International | Viemed Healthcare vs. West Pharmaceutical Services | Viemed Healthcare vs. ResMed Inc | Viemed Healthcare 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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