Correlation Between SurModics and PAVmed

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

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

Diversification Opportunities for SurModics and PAVmed

0.25

Correlation Coefficient

SurModics  PAVmed

Modest diversification

The 3 months correlation between SurModics and PAVmed is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SurModics and PAVmed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAVmed Inc 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 PAVmed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAVmed Inc has no effect on the direction of SurModics i.e., SurModics and PAVmed go up and down completely randomly.

Pair Corralation between SurModics and PAVmed

Given the investment horizon of 90 days SurModics is expected to generate 0.46 times more return on investment than PAVmed. However, SurModics is 2.18 times less risky than PAVmed. It trades about 0.02 of its potential returns per unit of risk. PAVmed Inc is currently generating about -0.03 per unit of risk. If you would invest  3,697  in SurModics on September 3, 2024 and sell it today you would earn a total of  267.00  from holding SurModics or generate 7.22% 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.  PAVmed Inc

SurModics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SurModics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, SurModics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PAVmed Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SurModics and PAVmed

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

The idea behind SurModics and PAVmed Inc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..