Correlation Between AptarGroup and ICU Medical

Can any of the company-specific risk be diversified away by investing in both AptarGroup 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 AptarGroup and ICU Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AptarGroup and ICU Medical, you can compare the effects of market volatilities on AptarGroup 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 AptarGroup with a short position of ICU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptarGroup and ICU Medical.

Diversification Opportunities for AptarGroup and ICU Medical

0.61

Correlation Coefficient

AptarGroup  ICU Medical

Poor diversification

The 3 months correlation between AptarGroup and ICU is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding AptarGroup and ICU Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICU Medical and AptarGroup 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 AptarGroup 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 AptarGroup i.e., AptarGroup and ICU Medical go up and down completely randomly.

Pair Corralation between AptarGroup and ICU Medical

Considering the 90-day investment horizon AptarGroup is expected to generate 0.64 times more return on investment than ICU Medical. However, AptarGroup is 1.56 times less risky than ICU Medical. It trades about -0.04 of its potential returns per unit of risk. ICU Medical is currently generating about -0.04 per unit of risk. If you would invest  15,345  in AptarGroup on January 12, 2025 and sell it today you would lose (934.00) from holding AptarGroup or give up 6.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

AptarGroup  vs.  ICU Medical

AptarGroup

Risk-Adjusted Performance

Very Weak

Over the last 90 days AptarGroup has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, AptarGroup is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

ICU Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days ICU Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with AptarGroup and ICU Medical

The main advantage of trading using opposite AptarGroup and ICU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptarGroup 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.

The idea behind AptarGroup and ICU Medical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.