Correlation Between SurModics and Monogram Orthopaedics

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

By analyzing existing cross correlation between SurModics and Monogram Orthopaedics Common, you can compare the effects of market volatilities on SurModics and Monogram Orthopaedics 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 Monogram Orthopaedics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SurModics and Monogram Orthopaedics.

Diversification Opportunities for SurModics and Monogram Orthopaedics

0.81

Correlation Coefficient

SurModics  Monogram Orthopaedics

Very poor diversification

The 3 months correlation between SurModics and Monogram is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SurModics and Monogram Orthopaedics Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monogram Orthopaedics 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 Monogram Orthopaedics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monogram Orthopaedics has no effect on the direction of SurModics i.e., SurModics and Monogram Orthopaedics go up and down completely randomly.

Pair Corralation between SurModics and Monogram Orthopaedics

Given the investment horizon of 90 days SurModics is expected to generate 2.64 times more return on investment than Monogram Orthopaedics. However, SurModics is 2.64 times more volatile than Monogram Orthopaedics Common. It trades about 0.27 of its potential returns per unit of risk. Monogram Orthopaedics Common is currently generating about -0.29 per unit of risk. If you would invest  3,139  in SurModics on May 14, 2025 and sell it today you would earn a total of  660.00  from holding SurModics or generate 21.03% return on investment over 90 days.

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

SurModics  vs.  Monogram Orthopaedics Common

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.

Monogram Orthopaedics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Monogram Orthopaedics Common are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Monogram Orthopaedics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SurModics and Monogram Orthopaedics

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

The idea behind SurModics and Monogram Orthopaedics Common 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.