Correlation Between Medtronic PLC and CryoLife
Can any of the company-specific risk be diversified away by investing in both Medtronic PLC and CryoLife 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 Medtronic PLC and CryoLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medtronic PLC and CryoLife, you can compare the effects of market volatilities on Medtronic PLC and CryoLife 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 Medtronic PLC with a short position of CryoLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medtronic PLC and CryoLife.
Diversification Opportunities for Medtronic PLC and CryoLife
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Medtronic and CryoLife is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Medtronic PLC and CryoLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoLife and Medtronic PLC 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 Medtronic PLC are associated (or correlated) with CryoLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoLife has no effect on the direction of Medtronic PLC i.e., Medtronic PLC and CryoLife go up and down completely randomly.
Pair Corralation between Medtronic PLC and CryoLife
Assuming the 90 days horizon Medtronic PLC is expected to under-perform the CryoLife. But the stock apears to be less risky and, when comparing its historical volatility, Medtronic PLC is 2.25 times less risky than CryoLife. The stock trades about -0.22 of its potential returns per unit of risk. The CryoLife is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,690 in CryoLife on September 26, 2024 and sell it today you would earn a total of 25.00 from holding CryoLife or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medtronic PLC vs. CryoLife
Performance |
| Timeline |
| Medtronic PLC |
| CryoLife |
Medtronic PLC and CryoLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medtronic PLC and CryoLife
The main advantage of trading using opposite Medtronic PLC and CryoLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medtronic PLC position performs unexpectedly, CryoLife 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 CryoLife will offset losses from the drop in CryoLife's long position.| Medtronic PLC vs. GALENA MINING LTD | Medtronic PLC vs. SERI INDUSTRIAL EO | Medtronic PLC vs. Zijin Mining Group | Medtronic PLC vs. GREENX METALS LTD |
| CryoLife vs. Abbott Laboratories | CryoLife vs. Medtronic PLC | CryoLife vs. Stryker | CryoLife vs. Boston Scientific |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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