Correlation Between Archrock and STRYKER

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

By analyzing existing cross correlation between Archrock and STRYKER P 4625, you can compare the effects of market volatilities on Archrock and STRYKER 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 Archrock with a short position of STRYKER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archrock and STRYKER.

Diversification Opportunities for Archrock and STRYKER

-0.37

Correlation Coefficient

Archrock  STRYKER

Very good diversification

The 3 months correlation between Archrock and STRYKER is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Archrock and STRYKER P 4625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRYKER P 4625 and Archrock 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 Archrock are associated (or correlated) with STRYKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRYKER P 4625 has no effect on the direction of Archrock i.e., Archrock and STRYKER go up and down completely randomly.

Pair Corralation between Archrock and STRYKER

Given the investment horizon of 90 days Archrock is expected to generate 3.12 times more return on investment than STRYKER. However, Archrock is 3.12 times more volatile than STRYKER P 4625. It trades about 0.21 of its potential returns per unit of risk. STRYKER P 4625 is currently generating about -0.07 per unit of risk. If you would invest  1,921  in Archrock on September 5, 2024 and sell it today you would earn a total of  671.00  from holding Archrock or generate 34.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	81.25%
Values	Daily Returns

Archrock  vs.  STRYKER P 4625

Archrock

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Archrock are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Archrock exhibited solid returns over the last few months and may actually be approaching a breakup point.

STRYKER P 4625

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STRYKER P 4625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, STRYKER is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Archrock and STRYKER

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

The idea behind Archrock and STRYKER P 4625 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.