Correlation Between Nortech Systems and SurModics
Can any of the company-specific risk be diversified away by investing in both Nortech Systems and SurModics 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 Nortech Systems and SurModics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nortech Systems Incorporated and SurModics, you can compare the effects of market volatilities on Nortech Systems and SurModics 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 Nortech Systems with a short position of SurModics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nortech Systems and SurModics.
Diversification Opportunities for Nortech Systems and SurModics
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nortech and SurModics is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nortech Systems Incorporated and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics and Nortech Systems 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 Nortech Systems Incorporated are associated (or correlated) with SurModics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SurModics has no effect on the direction of Nortech Systems i.e., Nortech Systems and SurModics go up and down completely randomly.
Pair Corralation between Nortech Systems and SurModics
Given the investment horizon of 90 days Nortech Systems Incorporated is expected to under-perform the SurModics. In addition to that, Nortech Systems is 5.72 times more volatile than SurModics. It trades about -0.15 of its total potential returns per unit of risk. SurModics is currently generating about 0.35 per unit of volatility. If you would invest 3,750 in SurModics on August 31, 2024 and sell it today you would earn a total of 204.00 from holding SurModics or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nortech Systems Incorporated vs. SurModics
Performance |
| Timeline |
| Nortech Systems |
| SurModics |
Nortech Systems and SurModics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nortech Systems and SurModics
The main advantage of trading using opposite Nortech Systems and SurModics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nortech Systems position performs unexpectedly, SurModics 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 SurModics will offset losses from the drop in SurModics' long position.| Nortech Systems vs. Neuropace | Nortech Systems vs. Electromed | Nortech Systems vs. Orthopediatrics Corp | Nortech Systems vs. SurModics |
| SurModics vs. Abbott Laboratories | SurModics vs. Medtronic PLC | SurModics vs. Edwards Lifesciences Corp | SurModics vs. ZimVie Inc |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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