Correlation Between NuVasive and ICU Medical
Can any of the company-specific risk be diversified away by investing in both NuVasive and ICU Medical 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 NuVasive and ICU Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NuVasive and ICU Medical, you can compare the effects of market volatilities on NuVasive and ICU Medical 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 NuVasive with a short position of ICU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NuVasive and ICU Medical.
Diversification Opportunities for NuVasive and ICU Medical
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NuVasive and ICU is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding NuVasive and ICU Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICU Medical and NuVasive 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 NuVasive are associated (or correlated) with ICU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICU Medical has no effect on the direction of NuVasive i.e., NuVasive and ICU Medical go up and down completely randomly.
Pair Corralation between NuVasive and ICU Medical
If you would invest 10,353 in ICU Medical on August 28, 2024 and sell it today you would earn a total of 6,428 from holding ICU Medical or generate 62.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
NuVasive vs. ICU Medical
Performance |
| Timeline |
| NuVasive |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ICU Medical |
NuVasive and ICU Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NuVasive and ICU Medical
The main advantage of trading using opposite NuVasive and ICU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NuVasive position performs unexpectedly, ICU Medical 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 ICU Medical will offset losses from the drop in ICU Medical's long position.The idea behind NuVasive and ICU Medical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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