Correlation Between SurModics and Abbott Laboratories
Can any of the company-specific risk be diversified away by investing in both SurModics and Abbott Laboratories 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 SurModics and Abbott Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SurModics and Abbott Laboratories, you can compare the effects of market volatilities on SurModics and Abbott Laboratories 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 SurModics with a short position of Abbott Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of SurModics and Abbott Laboratories.
Diversification Opportunities for SurModics and Abbott Laboratories
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between SurModics and Abbott is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding SurModics and Abbott Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbott Laboratories and SurModics 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 SurModics are associated (or correlated) with Abbott Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbott Laboratories has no effect on the direction of SurModics i.e., SurModics and Abbott Laboratories go up and down completely randomly.
Pair Corralation between SurModics and Abbott Laboratories
Given the investment horizon of 90 days SurModics is expected to generate 0.58 times more return on investment than Abbott Laboratories. However, SurModics is 1.73 times less risky than Abbott Laboratories. It trades about 0.29 of its potential returns per unit of risk. Abbott Laboratories is currently generating about 0.13 per unit of risk. If you would invest 3,780 in SurModics on August 28, 2024 and sell it today you would earn a total of 178.00 from holding SurModics or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SurModics vs. Abbott Laboratories
Performance |
| Timeline |
| SurModics |
| Abbott Laboratories |
SurModics and Abbott Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SurModics and Abbott Laboratories
The main advantage of trading using opposite SurModics and Abbott Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SurModics position performs unexpectedly, Abbott Laboratories 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 Abbott Laboratories will offset losses from the drop in Abbott Laboratories' long position.| SurModics vs. LivaNova PLC | SurModics vs. Electromed | SurModics vs. Orthopediatrics Corp | SurModics vs. Neuropace |
| Abbott Laboratories vs. AbbVie Inc | Abbott Laboratories vs. Eli Lilly and | Abbott Laboratories vs. Bristol Myers Squibb | Abbott Laboratories vs. Johnson Johnson |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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