Correlation Between Enovis Corp and SurModics

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

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

Diversification Opportunities for Enovis Corp and SurModics

0.69

Correlation Coefficient

Enovis Corp  SurModics

Poor diversification

The 3 months correlation between Enovis and SurModics is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Enovis Corp and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics and Enovis Corp 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 Enovis Corp 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 Enovis Corp i.e., Enovis Corp and SurModics go up and down completely randomly.

Pair Corralation between Enovis Corp and SurModics

Given the investment horizon of 90 days Enovis Corp is expected to under-perform the SurModics. In addition to that, Enovis Corp is 2.98 times more volatile than SurModics. It trades about -0.16 of its total potential returns per unit of risk. SurModics is currently generating about -0.19 per unit of volatility. If you would invest  3,953  in SurModics on July 28, 2024 and sell it today you would lose (194.00) from holding SurModics or give up 4.91% of portfolio value over 90 days.

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

Enovis Corp  vs.  SurModics

Enovis Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enovis Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in November 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

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 Enovis Corp and SurModics

The main advantage of trading using opposite Enovis Corp and SurModics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enovis Corp 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 Enovis Corp 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.