Correlation Between Heartland Financial and Stryker
Can any of the company-specific risk be diversified away by investing in both Heartland Financial 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 Heartland Financial and Stryker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Financial USA and Stryker, you can compare the effects of market volatilities on Heartland Financial 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 Heartland Financial with a short position of Stryker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Financial and Stryker.
Diversification Opportunities for Heartland Financial and Stryker
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Heartland and Stryker is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Financial USA and Stryker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryker and Heartland Financial 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 Heartland Financial USA 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 Heartland Financial i.e., Heartland Financial and Stryker go up and down completely randomly.
Pair Corralation between Heartland Financial and Stryker
Assuming the 90 days horizon Heartland Financial USA is expected to generate 1.67 times more return on investment than Stryker. However, Heartland Financial is 1.67 times more volatile than Stryker. It trades about 0.28 of its potential returns per unit of risk. Stryker is currently generating about 0.26 per unit of risk. If you would invest 5,374 in Heartland Financial USA on September 2, 2024 and sell it today you would earn a total of 976.00 from holding Heartland Financial USA or generate 18.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heartland Financial USA vs. Stryker
Performance |
| Timeline |
| Heartland Financial USA |
| Stryker |
Heartland Financial and Stryker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartland Financial and Stryker
The main advantage of trading using opposite Heartland Financial and Stryker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Financial 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.| Heartland Financial vs. UNICREDIT SPA ADR | Heartland Financial vs. Deutsche Bank Aktiengesellschaft | Heartland Financial vs. Superior Plus Corp | Heartland Financial vs. Origin Agritech |
| Stryker vs. Superior Plus Corp | Stryker vs. NMI Holdings | Stryker vs. Origin Agritech | Stryker vs. SIVERS SEMICONDUCTORS AB |
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.
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