Correlation Between SurModics and Stryker
Can any of the company-specific risk be diversified away by investing in both SurModics and Stryker 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 Stryker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SurModics and Stryker, you can compare the effects of market volatilities on SurModics and Stryker 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 Stryker. Check out your portfolio center. Please also check ongoing floating volatility patterns of SurModics and Stryker.
Diversification Opportunities for SurModics and Stryker
Average diversification
The 3 months correlation between SurModics and Stryker is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SurModics and Stryker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryker 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 Stryker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stryker has no effect on the direction of SurModics i.e., SurModics and Stryker go up and down completely randomly.
Pair Corralation between SurModics and Stryker
Given the investment horizon of 90 days SurModics is expected to generate 1.98 times less return on investment than Stryker. But when comparing it to its historical volatility, SurModics is 1.68 times less risky than Stryker. It trades about 0.29 of its potential returns per unit of risk. Stryker is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 35,601 in Stryker on August 28, 2024 and sell it today you would earn a total of 3,370 from holding Stryker or generate 9.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SurModics vs. Stryker
Performance |
| Timeline |
| SurModics |
| Stryker |
SurModics and Stryker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SurModics and Stryker
The main advantage of trading using opposite SurModics and Stryker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SurModics position performs unexpectedly, Stryker 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 Stryker will offset losses from the drop in Stryker's long position.| SurModics vs. LivaNova PLC | SurModics vs. Electromed | SurModics vs. Orthopediatrics Corp | SurModics vs. Neuropace |
| Stryker vs. Boston Scientific Corp | Stryker vs. Abbott Laboratories | Stryker vs. Medtronic PLC | Stryker vs. DexCom 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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