Correlation Between Hologic and ICU Medical

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

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

Diversification Opportunities for Hologic and ICU Medical

-0.51

Correlation Coefficient

Hologic  ICU Medical

Excellent diversification

The 3 months correlation between Hologic and ICU is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hologic and ICU Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICU Medical and Hologic 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 Hologic 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 Hologic i.e., Hologic and ICU Medical go up and down completely randomly.

Pair Corralation between Hologic and ICU Medical

Given the investment horizon of 90 days Hologic is expected to generate 1.08 times more return on investment than ICU Medical. However, Hologic is 1.08 times more volatile than ICU Medical. It trades about 0.11 of its potential returns per unit of risk. ICU Medical is currently generating about -0.05 per unit of risk. If you would invest  5,728  in Hologic on May 1, 2025 and sell it today you would earn a total of  876.00  from holding Hologic or generate 15.29% return on investment over 90 days.

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

Hologic  vs.  ICU Medical

Hologic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hologic are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady essential indicators, Hologic showed solid returns over the last few months and may actually be approaching a breakup point.

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 unsteady 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 Hologic and ICU Medical

The main advantage of trading using opposite Hologic and ICU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hologic 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 Hologic 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.