Correlation Between Laboratory and Integer Holdings

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

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

Diversification Opportunities for Laboratory and Integer Holdings

0.76

Correlation Coefficient

Laboratory  Integer Holdings

Poor diversification

The 3 months correlation between Laboratory and Integer is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Laboratory of and Integer Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integer Holdings Corp and Laboratory 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 Laboratory of are associated (or correlated) with Integer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integer Holdings Corp has no effect on the direction of Laboratory i.e., Laboratory and Integer Holdings go up and down completely randomly.

Pair Corralation between Laboratory and Integer Holdings

Allowing for the 90-day total investment horizon Laboratory of is expected to under-perform the Integer Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Laboratory of is 1.09 times less risky than Integer Holdings. The stock trades about -0.13 of its potential returns per unit of risk. The Integer Holdings Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  13,453  in Integer Holdings Corp on September 17, 2024 and sell it today you would earn a total of  418.00  from holding Integer Holdings Corp or generate 3.11% return on investment over 90 days.

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

Laboratory of  vs.  Integer Holdings Corp

Laboratory

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Laboratory of are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Laboratory is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Integer Holdings Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integer Holdings Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical and fundamental indicators, Integer Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Laboratory and Integer Holdings

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

The idea behind Laboratory of and Integer Holdings Corp 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.