Correlation Between Surgical Science and Alligator Bioscience

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

By analyzing existing cross correlation between Surgical Science Sweden and Alligator Bioscience AB, you can compare the effects of market volatilities on Surgical Science and Alligator Bioscience 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 Surgical Science with a short position of Alligator Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surgical Science and Alligator Bioscience.

Diversification Opportunities for Surgical Science and Alligator Bioscience

0.01

Correlation Coefficient

Surgical Science  Alligator Bioscience

Significant diversification

The 3 months correlation between Surgical and Alligator is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Surgical Science Sweden and Alligator Bioscience AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alligator Bioscience and Surgical Science 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 Surgical Science Sweden are associated (or correlated) with Alligator Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alligator Bioscience has no effect on the direction of Surgical Science i.e., Surgical Science and Alligator Bioscience go up and down completely randomly.

Pair Corralation between Surgical Science and Alligator Bioscience

Assuming the 90 days trading horizon Surgical Science is expected to generate 1.24 times less return on investment than Alligator Bioscience. But when comparing it to its historical volatility, Surgical Science Sweden is 2.94 times less risky than Alligator Bioscience. It trades about 0.1 of its potential returns per unit of risk. Alligator Bioscience AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  527.00  in Alligator Bioscience AB on April 23, 2025 and sell it today you would earn a total of  25.00  from holding Alligator Bioscience AB or generate 4.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Surgical Science Sweden  vs.  Alligator Bioscience AB

Surgical Science Sweden

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Surgical Science Sweden are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Surgical Science unveiled solid returns over the last few months and may actually be approaching a breakup point.

Alligator Bioscience

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alligator Bioscience AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alligator Bioscience unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Surgical Science and Alligator Bioscience

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

The idea behind Surgical Science Sweden and Alligator Bioscience AB 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.