Correlation Between Orthofix Medical and ICU Medical

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

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

Diversification Opportunities for Orthofix Medical and ICU Medical

0.61

Correlation Coefficient

Orthofix Medical  ICU Medical

Poor diversification

The 3 months correlation between Orthofix and ICU is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Orthofix Medical and ICU Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICU Medical and Orthofix Medical 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 Orthofix Medical are associated (or correlated) with ICU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICU Medical has no effect on the direction of Orthofix Medical i.e., Orthofix Medical and ICU Medical go up and down completely randomly.

Pair Corralation between Orthofix Medical and ICU Medical

Given the investment horizon of 90 days Orthofix Medical is expected to under-perform the ICU Medical. In addition to that, Orthofix Medical is 1.12 times more volatile than ICU Medical. It trades about -0.13 of its total potential returns per unit of risk. ICU Medical is currently generating about -0.05 per unit of volatility. If you would invest  13,716  in ICU Medical on April 24, 2025 and sell it today you would lose (1,092) from holding ICU Medical or give up 7.96% of portfolio value over 90 days.

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

Orthofix Medical  vs.  ICU Medical

Orthofix Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orthofix Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

ICU Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days ICU Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Orthofix Medical and ICU Medical

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

The idea behind Orthofix Medical and ICU Medical 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.