Correlation Between SurModics and Bioventus

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Can any of the company-specific risk be diversified away by investing in both SurModics and Bioventus 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 Bioventus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SurModics and Bioventus, you can compare the effects of market volatilities on SurModics and Bioventus 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 Bioventus. Check out your portfolio center. Please also check ongoing floating volatility patterns of SurModics and Bioventus.

Diversification Opportunities for SurModics and Bioventus

-0.76
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between SurModics and Bioventus is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding SurModics and Bioventus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioventus 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 Bioventus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioventus has no effect on the direction of SurModics i.e., SurModics and Bioventus go up and down completely randomly.

Pair Corralation between SurModics and Bioventus

Given the investment horizon of 90 days SurModics is expected to generate 2.11 times less return on investment than Bioventus. But when comparing it to its historical volatility, SurModics is 1.63 times less risky than Bioventus. It trades about 0.08 of its potential returns per unit of risk. Bioventus is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  270.00  in Bioventus on August 27, 2024 and sell it today you would earn a total of  901.00  from holding Bioventus or generate 333.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

SurModics  vs.  Bioventus

 Performance 
       Timeline  
SurModics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SurModics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, SurModics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Bioventus 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Bioventus are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bioventus unveiled solid returns over the last few months and may actually be approaching a breakup point.

SurModics and Bioventus Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SurModics and Bioventus

The main advantage of trading using opposite SurModics and Bioventus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SurModics position performs unexpectedly, Bioventus 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 Bioventus will offset losses from the drop in Bioventus' long position.
The idea behind SurModics and Bioventus 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.
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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