Correlation Between Dominari Holdings and SurModics

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

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

Diversification Opportunities for Dominari Holdings and SurModics

-0.5

Correlation Coefficient

Dominari Holdings  SurModics

Very good diversification

The 3 months correlation between Dominari and SurModics is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dominari Holdings and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics and Dominari Holdings 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 Dominari Holdings are associated (or correlated) with SurModics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SurModics has no effect on the direction of Dominari Holdings i.e., Dominari Holdings and SurModics go up and down completely randomly.

Pair Corralation between Dominari Holdings and SurModics

Given the investment horizon of 90 days Dominari Holdings is expected to generate 6.57 times more return on investment than SurModics. However, Dominari Holdings is 6.57 times more volatile than SurModics. It trades about 0.1 of its potential returns per unit of risk. SurModics is currently generating about -0.19 per unit of risk. If you would invest  156.00  in Dominari Holdings on July 28, 2024 and sell it today you would earn a total of  22.00  from holding Dominari Holdings or generate 14.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Dominari Holdings  vs.  SurModics

Dominari Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dominari Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating primary indicators, Dominari Holdings may actually be approaching a critical reversion point that can send shares even higher in November 2024.

SurModics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SurModics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Dominari Holdings and SurModics

The main advantage of trading using opposite Dominari Holdings and SurModics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominari Holdings position performs unexpectedly, SurModics 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 SurModics will offset losses from the drop in SurModics' long position.

The idea behind Dominari Holdings and SurModics 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.