Correlation Between Integer Holdings and SurModics

Can any of the company-specific risk be diversified away by investing in both Integer 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 Integer Holdings and SurModics 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 SurModics, you can compare the effects of market volatilities on Integer 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 Integer Holdings with a short position of SurModics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integer Holdings and SurModics.

Diversification Opportunities for Integer Holdings and SurModics

-0.41

Correlation Coefficient

Integer Holdings  SurModics

Very good diversification

The 3 months correlation between Integer and SurModics is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Integer Holdings Corp and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics 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 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 Integer Holdings i.e., Integer Holdings and SurModics go up and down completely randomly.

Pair Corralation between Integer Holdings and SurModics

Given the investment horizon of 90 days Integer Holdings Corp is expected to generate 2.85 times more return on investment than SurModics. However, Integer Holdings is 2.85 times more volatile than SurModics. It trades about 0.05 of its potential returns per unit of risk. SurModics is currently generating about -0.07 per unit of risk. If you would invest  13,106  in Integer Holdings Corp on August 17, 2024 and sell it today you would earn a total of  212.00  from holding Integer Holdings Corp or generate 1.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Integer Holdings Corp  vs.  SurModics

Integer Holdings Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integer Holdings Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, Integer Holdings may actually be approaching a critical reversion point that can send shares even higher in December 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 fairly strong fundamental indicators, SurModics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Integer Holdings and SurModics

The main advantage of trading using opposite Integer Holdings and SurModics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integer 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 Integer Holdings 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.

Check out your portfolio center.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.