Correlation Between Monogram Orthopaedics and Integra LifeSciences

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

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

Diversification Opportunities for Monogram Orthopaedics and Integra LifeSciences

-0.41

Correlation Coefficient

Monogram Orthopaedics  Integra LifeSciences

Very good diversification

The 3 months correlation between Monogram and Integra is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Monogram Orthopaedics Common and Integra LifeSciences Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integra LifeSciences and Monogram Orthopaedics 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 Monogram Orthopaedics Common are associated (or correlated) with Integra LifeSciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integra LifeSciences has no effect on the direction of Monogram Orthopaedics i.e., Monogram Orthopaedics and Integra LifeSciences go up and down completely randomly.

Pair Corralation between Monogram Orthopaedics and Integra LifeSciences

Given the investment horizon of 90 days Monogram Orthopaedics is expected to generate 31.62 times less return on investment than Integra LifeSciences. But when comparing it to its historical volatility, Monogram Orthopaedics Common is 1.03 times less risky than Integra LifeSciences. It trades about 0.0 of its potential returns per unit of risk. Integra LifeSciences Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,754  in Integra LifeSciences Holdings on September 22, 2024 and sell it today you would earn a total of  426.00  from holding Integra LifeSciences Holdings or generate 24.29% return on investment over 90 days.

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

Monogram Orthopaedics Common  vs.  Integra LifeSciences Holdings

Monogram Orthopaedics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monogram Orthopaedics Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Monogram Orthopaedics is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Integra LifeSciences

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integra LifeSciences Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Integra LifeSciences unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Monogram Orthopaedics and Integra LifeSciences

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

The idea behind Monogram Orthopaedics Common and Integra LifeSciences Holdings 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.