Correlation Between NYSE Composite and ICU Medical
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and ICU Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and ICU Medical, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of ICU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and ICU Medical.
Diversification Opportunities for NYSE Composite and ICU Medical
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and ICU is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and ICU Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICU Medical and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and ICU Medical go up and down completely randomly.
Pair Corralation between NYSE Composite and ICU Medical
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.35 times more return on investment than ICU Medical. However, NYSE Composite is 2.85 times less risky than ICU Medical. It trades about 0.29 of its potential returns per unit of risk. ICU Medical is currently generating about -0.22 per unit of risk. If you would invest 1,941,627 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 79,355 from holding NYSE Composite or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. ICU Medical
Performance |
| Timeline |
NYSE Composite and ICU Medical Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
ICU Medical
Pair trading matchups for ICU Medical
Pair Trading with NYSE Composite and ICU Medical
The main advantage of trading using opposite NYSE Composite and ICU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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