Correlation Between Integer Holdings and Cochlear

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

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

Diversification Opportunities for Integer Holdings and Cochlear

-0.54

Correlation Coefficient

Integer Holdings  Cochlear

Excellent diversification

The 3 months correlation between Integer and Cochlear is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Integer Holdings Corp and Cochlear Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cochlear Limited and Integer 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 Integer Holdings Corp are associated (or correlated) with Cochlear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cochlear Limited has no effect on the direction of Integer Holdings i.e., Integer Holdings and Cochlear go up and down completely randomly.

Pair Corralation between Integer Holdings and Cochlear

Given the investment horizon of 90 days Integer Holdings Corp is expected to under-perform the Cochlear. But the stock apears to be less risky and, when comparing its historical volatility, Integer Holdings Corp is 1.53 times less risky than Cochlear. The stock trades about -0.11 of its potential returns per unit of risk. The Cochlear Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  17,728  in Cochlear Limited on May 7, 2025 and sell it today you would earn a total of  2,541  from holding Cochlear Limited or generate 14.33% return on investment over 90 days.

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

Integer Holdings Corp  vs.  Cochlear Limited

Integer Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integer Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Cochlear Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cochlear Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Cochlear reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integer Holdings and Cochlear

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

The idea behind Integer Holdings Corp and Cochlear Limited 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.