Correlation Between SurModics and Werewolf Therapeutics

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

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

Diversification Opportunities for SurModics and Werewolf Therapeutics

0.32

Correlation Coefficient

SurModics  Werewolf Therapeutics

Weak diversification

The 3 months correlation between SurModics and Werewolf is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding SurModics and Werewolf Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Werewolf Therapeutics and SurModics 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 SurModics are associated (or correlated) with Werewolf Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Werewolf Therapeutics has no effect on the direction of SurModics i.e., SurModics and Werewolf Therapeutics go up and down completely randomly.

Pair Corralation between SurModics and Werewolf Therapeutics

Given the investment horizon of 90 days SurModics is expected to generate 0.46 times more return on investment than Werewolf Therapeutics. However, SurModics is 2.16 times less risky than Werewolf Therapeutics. It trades about 0.22 of its potential returns per unit of risk. Werewolf Therapeutics is currently generating about 0.08 per unit of risk. If you would invest  2,803  in SurModics on May 15, 2025 and sell it today you would earn a total of  998.00  from holding SurModics or generate 35.6% return on investment over 90 days.

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

SurModics  vs.  Werewolf Therapeutics

SurModics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SurModics are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, SurModics showed solid returns over the last few months and may actually be approaching a breakup point.

Werewolf Therapeutics

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Werewolf Therapeutics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Werewolf Therapeutics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SurModics and Werewolf Therapeutics

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

The idea behind SurModics and Werewolf Therapeutics 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.