Correlation Between Pulmonx Corp and Stryker

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

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

Diversification Opportunities for Pulmonx Corp and Stryker

-0.05

Correlation Coefficient

Pulmonx Corp  Stryker

Good diversification

The 3 months correlation between Pulmonx and Stryker is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Pulmonx Corp and Stryker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryker and Pulmonx Corp 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 Pulmonx Corp 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 has no effect on the direction of Pulmonx Corp i.e., Pulmonx Corp and Stryker go up and down completely randomly.

Pair Corralation between Pulmonx Corp and Stryker

Given the investment horizon of 90 days Pulmonx Corp is expected to under-perform the Stryker. In addition to that, Pulmonx Corp is 4.63 times more volatile than Stryker. It trades about -0.09 of its total potential returns per unit of risk. Stryker is currently generating about 0.12 per unit of volatility. If you would invest  32,768  in Stryker on March 22, 2024 and sell it today you would earn a total of  1,716  from holding Stryker or generate 5.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

Pulmonx Corp  vs.  Stryker

Pulmonx Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pulmonx Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Stryker

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stryker has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Stryker is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Pulmonx Corp and Stryker

The main advantage of trading using opposite Pulmonx Corp and Stryker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pulmonx Corp 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 Pulmonx Corp and Stryker 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.