Correlation Between Zimmer Biomet and Novacyt SA
Can any of the company-specific risk be diversified away by investing in both Zimmer Biomet and Novacyt SA 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 Novacyt SA 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 Novacyt SA, you can compare the effects of market volatilities on Zimmer Biomet and Novacyt SA 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 Novacyt SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zimmer Biomet and Novacyt SA.
Diversification Opportunities for Zimmer Biomet and Novacyt SA
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zimmer and Novacyt is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Zimmer Biomet Holdings and Novacyt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novacyt SA 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 Novacyt SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novacyt SA has no effect on the direction of Zimmer Biomet i.e., Zimmer Biomet and Novacyt SA go up and down completely randomly.
Pair Corralation between Zimmer Biomet and Novacyt SA
Considering the 90-day investment horizon Zimmer Biomet Holdings is expected to under-perform the Novacyt SA. But the stock apears to be less risky and, when comparing its historical volatility, Zimmer Biomet Holdings is 5.39 times less risky than Novacyt SA. The stock trades about -0.02 of its potential returns per unit of risk. The Novacyt SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 82.00 in Novacyt SA on September 19, 2024 and sell it today you would lose (12.00) from holding Novacyt SA or give up 14.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zimmer Biomet Holdings vs. Novacyt SA
Performance |
| Timeline |
| Zimmer Biomet Holdings |
| Novacyt SA |
Zimmer Biomet and Novacyt SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zimmer Biomet and Novacyt SA
The main advantage of trading using opposite Zimmer Biomet and Novacyt SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zimmer Biomet position performs unexpectedly, Novacyt SA 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 Novacyt SA will offset losses from the drop in Novacyt SA's long position.| Zimmer Biomet vs. Orthofix Medical | Zimmer Biomet vs. SurModics | Zimmer Biomet vs. Pulmonx Corp | Zimmer Biomet vs. CVRx Inc |
| Novacyt SA vs. Aethlon Medical | Novacyt SA vs. Bone Biologics Corp | Novacyt SA vs. Tivic Health Systems | Novacyt SA vs. Cytosorbents Crp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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