Correlation Between Zimmer Biomet and Stratec SE

Can any of the company-specific risk be diversified away by investing in both Zimmer Biomet and Stratec SE 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 Stratec SE 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 Stratec SE, you can compare the effects of market volatilities on Zimmer Biomet and Stratec SE 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 Stratec SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zimmer Biomet and Stratec SE.

Diversification Opportunities for Zimmer Biomet and Stratec SE

-0.46

Correlation Coefficient

Zimmer Biomet  Stratec SE

Very good diversification

The 3 months correlation between Zimmer and Stratec is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Zimmer Biomet Holdings and Stratec SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratec SE 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 Stratec SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratec SE has no effect on the direction of Zimmer Biomet i.e., Zimmer Biomet and Stratec SE go up and down completely randomly.

Pair Corralation between Zimmer Biomet and Stratec SE

Assuming the 90 days horizon Zimmer Biomet Holdings is expected to under-perform the Stratec SE. But the stock apears to be less risky and, when comparing its historical volatility, Zimmer Biomet Holdings is 1.65 times less risky than Stratec SE. The stock trades about -0.04 of its potential returns per unit of risk. The Stratec SE is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,239  in Stratec SE on April 23, 2025 and sell it today you would earn a total of  661.00  from holding Stratec SE or generate 29.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Zimmer Biomet Holdings  vs.  Stratec SE

Zimmer Biomet Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zimmer Biomet Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Zimmer Biomet is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Stratec SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stratec SE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Stratec SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zimmer Biomet and Stratec SE

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

The idea behind Zimmer Biomet Holdings and Stratec SE 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.