Correlation Between SurModics and Zimmer Biomet
Can any of the company-specific risk be diversified away by investing in both SurModics and Zimmer Biomet 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 Zimmer Biomet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SurModics and Zimmer Biomet Holdings, you can compare the effects of market volatilities on SurModics and Zimmer Biomet 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 Zimmer Biomet. Check out your portfolio center. Please also check ongoing floating volatility patterns of SurModics and Zimmer Biomet.
Diversification Opportunities for SurModics and Zimmer Biomet
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SurModics and Zimmer is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding SurModics and Zimmer Biomet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zimmer Biomet Holdings 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 Zimmer Biomet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zimmer Biomet Holdings has no effect on the direction of SurModics i.e., SurModics and Zimmer Biomet go up and down completely randomly.
Pair Corralation between SurModics and Zimmer Biomet
Given the investment horizon of 90 days SurModics is expected to generate 0.59 times more return on investment than Zimmer Biomet. However, SurModics is 1.69 times less risky than Zimmer Biomet. It trades about 0.34 of its potential returns per unit of risk. Zimmer Biomet Holdings is currently generating about 0.19 per unit of risk. If you would invest 3,752 in SurModics on September 1, 2024 and sell it today you would earn a total of 193.00 from holding SurModics or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SurModics vs. Zimmer Biomet Holdings
Performance |
| Timeline |
| SurModics |
| Zimmer Biomet Holdings |
SurModics and Zimmer Biomet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SurModics and Zimmer Biomet
The main advantage of trading using opposite SurModics and Zimmer Biomet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SurModics position performs unexpectedly, Zimmer Biomet 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 Zimmer Biomet will offset losses from the drop in Zimmer Biomet's long position.| SurModics vs. LivaNova PLC | SurModics vs. Electromed | SurModics vs. Orthopediatrics Corp | SurModics vs. Neuropace |
| Zimmer Biomet vs. Profound Medical Corp | Zimmer Biomet vs. Si Bone | Zimmer Biomet vs. Nevro Corp | Zimmer Biomet vs. Paragon 28 |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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