Correlation Between Iradimed and CONMED

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

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

Diversification Opportunities for Iradimed and CONMED

-0.11

Correlation Coefficient

Iradimed  CONMED

Good diversification

The 3 months correlation between Iradimed and CONMED is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Iradimed Co and CONMED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONMED and Iradimed 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 Iradimed Co are associated (or correlated) with CONMED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONMED has no effect on the direction of Iradimed i.e., Iradimed and CONMED go up and down completely randomly.

Pair Corralation between Iradimed and CONMED

Given the investment horizon of 90 days Iradimed Co is expected to generate 0.96 times more return on investment than CONMED. However, Iradimed Co is 1.04 times less risky than CONMED. It trades about 0.04 of its potential returns per unit of risk. CONMED is currently generating about -0.04 per unit of risk. If you would invest  3,823  in Iradimed Co on July 28, 2024 and sell it today you would earn a total of  1,216  from holding Iradimed Co or generate 31.81% return on investment over 90 days.

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

Iradimed Co  vs.  CONMED

Iradimed

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Iradimed Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, Iradimed may actually be approaching a critical reversion point that can send shares even higher in November 2024.

CONMED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONMED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Iradimed and CONMED

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

The idea behind Iradimed Co and CONMED 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.