Correlation Between Zimmer Biomet and Baxter International
Can any of the company-specific risk be diversified away by investing in both Zimmer Biomet and Baxter International 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 Zimmer Biomet and Baxter International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zimmer Biomet Holdings and Baxter International, you can compare the effects of market volatilities on Zimmer Biomet and Baxter International 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 Zimmer Biomet with a short position of Baxter International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zimmer Biomet and Baxter International.
Diversification Opportunities for Zimmer Biomet and Baxter International
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zimmer and Baxter is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Zimmer Biomet Holdings and Baxter International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baxter International and Zimmer Biomet 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 Zimmer Biomet Holdings are associated (or correlated) with Baxter International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baxter International has no effect on the direction of Zimmer Biomet i.e., Zimmer Biomet and Baxter International go up and down completely randomly.
Pair Corralation between Zimmer Biomet and Baxter International
Considering the 90-day investment horizon Zimmer Biomet Holdings is expected to generate 0.7 times more return on investment than Baxter International. However, Zimmer Biomet Holdings is 1.42 times less risky than Baxter International. It trades about 0.09 of its potential returns per unit of risk. Baxter International is currently generating about -0.18 per unit of risk. If you would invest 10,841 in Zimmer Biomet Holdings on September 5, 2024 and sell it today you would earn a total of 233.00 from holding Zimmer Biomet Holdings or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zimmer Biomet Holdings vs. Baxter International
Performance |
| Timeline |
| Zimmer Biomet Holdings |
| Baxter International |
Zimmer Biomet and Baxter International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zimmer Biomet and Baxter International
The main advantage of trading using opposite Zimmer Biomet and Baxter International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zimmer Biomet position performs unexpectedly, Baxter International 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 Baxter International will offset losses from the drop in Baxter International's long position.| Zimmer Biomet vs. Baxter International | Zimmer Biomet vs. West Pharmaceutical Services | Zimmer Biomet vs. ResMed Inc | Zimmer Biomet vs. ICU Medical |
| Baxter International vs. Embecta Corp | Baxter International vs. West Pharmaceutical Services | Baxter International vs. ResMed Inc | Baxter International vs. The Cooper Companies, |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |