Correlation Between Zimmer Biomet and Smith Nephew
Can any of the company-specific risk be diversified away by investing in both Zimmer Biomet and Smith Nephew 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 Zimmer Biomet and Smith Nephew into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zimmer Biomet Holdings and Smith Nephew SNATS, you can compare the effects of market volatilities on Zimmer Biomet and Smith Nephew 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 Zimmer Biomet with a short position of Smith Nephew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zimmer Biomet and Smith Nephew.
Diversification Opportunities for Zimmer Biomet and Smith Nephew
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zimmer and Smith is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Zimmer Biomet Holdings and Smith Nephew SNATS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smith Nephew SNATS and Zimmer Biomet 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 Zimmer Biomet Holdings are associated (or correlated) with Smith Nephew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smith Nephew SNATS has no effect on the direction of Zimmer Biomet i.e., Zimmer Biomet and Smith Nephew go up and down completely randomly.
Pair Corralation between Zimmer Biomet and Smith Nephew
Considering the 90-day investment horizon Zimmer Biomet Holdings is expected to under-perform the Smith Nephew. In addition to that, Zimmer Biomet is 1.25 times more volatile than Smith Nephew SNATS. It trades about -0.09 of its total potential returns per unit of risk. Smith Nephew SNATS is currently generating about -0.09 per unit of volatility. If you would invest 3,667 in Smith Nephew SNATS on August 21, 2025 and sell it today you would lose (413.00) from holding Smith Nephew SNATS or give up 11.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Zimmer Biomet Holdings vs. Smith Nephew SNATS
Performance |
| Timeline |
| Zimmer Biomet Holdings |
| Smith Nephew SNATS |
Zimmer Biomet and Smith Nephew Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zimmer Biomet and Smith Nephew
The main advantage of trading using opposite Zimmer Biomet and Smith Nephew positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zimmer Biomet position performs unexpectedly, Smith Nephew 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 Smith Nephew will offset losses from the drop in Smith Nephew's long position.| Zimmer Biomet vs. Smith Nephew SNATS | Zimmer Biomet vs. Quest Diagnostics Incorporated | Zimmer Biomet vs. STERIS plc | Zimmer Biomet vs. Waters |
| Smith Nephew vs. Hologic | Smith Nephew vs. Zimmer Biomet Holdings | Smith Nephew vs. Fresenius Medical Care | Smith Nephew vs. Medpace Holdings |
Check out your portfolio center.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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