Correlation Between Orthopediatrics Corp and SurModics

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

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

Diversification Opportunities for Orthopediatrics Corp and SurModics

0.36

Correlation Coefficient

Orthopediatrics Corp  SurModics

Weak diversification

The 3 months correlation between Orthopediatrics and SurModics is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Orthopediatrics Corp and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics and Orthopediatrics 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 Orthopediatrics 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 Orthopediatrics Corp i.e., Orthopediatrics Corp and SurModics go up and down completely randomly.

Pair Corralation between Orthopediatrics Corp and SurModics

Given the investment horizon of 90 days Orthopediatrics Corp is expected to generate 1.15 times more return on investment than SurModics. However, Orthopediatrics Corp is 1.15 times more volatile than SurModics. It trades about -0.05 of its potential returns per unit of risk. SurModics is currently generating about -0.11 per unit of risk. If you would invest  2,405  in Orthopediatrics Corp on February 3, 2025 and sell it today you would lose (265.00) from holding Orthopediatrics Corp or give up 11.02% of portfolio value over 90 days.

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

Orthopediatrics Corp  vs.  SurModics

Orthopediatrics Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orthopediatrics Corp 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 stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

SurModics

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Orthopediatrics Corp and SurModics

The main advantage of trading using opposite Orthopediatrics Corp and SurModics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orthopediatrics 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 Orthopediatrics 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.