Correlation Between STERIS Plc and Aurora Spine

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

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

Diversification Opportunities for STERIS Plc and Aurora Spine

-0.52

Correlation Coefficient

STERIS Plc  Aurora Spine

Excellent diversification

The 3 months correlation between STERIS and Aurora is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding STERIS plc and Aurora Spine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Spine and STERIS Plc 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 STERIS plc are associated (or correlated) with Aurora Spine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Spine has no effect on the direction of STERIS Plc i.e., STERIS Plc and Aurora Spine go up and down completely randomly.

Pair Corralation between STERIS Plc and Aurora Spine

Considering the 90-day investment horizon STERIS Plc is expected to generate 2.68 times less return on investment than Aurora Spine. But when comparing it to its historical volatility, STERIS plc is 2.86 times less risky than Aurora Spine. It trades about 0.02 of its potential returns per unit of risk. Aurora Spine is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  25.00  in Aurora Spine on May 3, 2025 and sell it today you would earn a total of  0.00  from holding Aurora Spine or generate 0.0% return on investment over 90 days.

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

STERIS plc  vs.  Aurora Spine

STERIS plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in STERIS plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, STERIS Plc is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Aurora Spine

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Spine are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Aurora Spine is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with STERIS Plc and Aurora Spine

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

The idea behind STERIS plc and Aurora Spine 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.