Correlation Between Danaher and ICU Medical
Can any of the company-specific risk be diversified away by investing in both Danaher and ICU Medical 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 Danaher and ICU Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danaher and ICU Medical, you can compare the effects of market volatilities on Danaher and ICU Medical 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 Danaher with a short position of ICU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danaher and ICU Medical.
Diversification Opportunities for Danaher and ICU Medical
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Danaher and ICU is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Danaher and ICU Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICU Medical and Danaher 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 Danaher are associated (or correlated) with ICU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICU Medical has no effect on the direction of Danaher i.e., Danaher and ICU Medical go up and down completely randomly.
Pair Corralation between Danaher and ICU Medical
Considering the 90-day investment horizon Danaher is expected to generate 0.68 times more return on investment than ICU Medical. However, Danaher is 1.48 times less risky than ICU Medical. It trades about 0.02 of its potential returns per unit of risk. ICU Medical is currently generating about -0.03 per unit of risk. If you would invest 21,652 in Danaher on February 3, 2024 and sell it today you would earn a total of 3,032 from holding Danaher or generate 14.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Danaher vs. ICU Medical
Performance |
Timeline |
Danaher |
ICU Medical |
Danaher and ICU Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Danaher and ICU Medical
The main advantage of trading using opposite Danaher and ICU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danaher position performs unexpectedly, ICU Medical 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 ICU Medical will offset losses from the drop in ICU Medical's long position.Danaher vs. Agilent Technologies | Danaher vs. Illumina | Danaher vs. IDEXX Laboratories | Danaher vs. Waters |
ICU Medical vs. Baxter International | ICU Medical vs. West Pharmaceutical Services | ICU Medical vs. ResMed Inc | ICU Medical 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |