Correlation Between Medtronic PLC and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both Medtronic PLC and Geratherm Medical 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 Geratherm Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medtronic PLC and Geratherm Medical AG, you can compare the effects of market volatilities on Medtronic PLC and Geratherm Medical 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 Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medtronic PLC and Geratherm Medical.
Diversification Opportunities for Medtronic PLC and Geratherm Medical
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medtronic and Geratherm is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Medtronic PLC and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical 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 Geratherm Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geratherm Medical has no effect on the direction of Medtronic PLC i.e., Medtronic PLC and Geratherm Medical go up and down completely randomly.
Pair Corralation between Medtronic PLC and Geratherm Medical
Assuming the 90 days horizon Medtronic PLC is expected to generate 0.37 times more return on investment than Geratherm Medical. However, Medtronic PLC is 2.71 times less risky than Geratherm Medical. It trades about -0.11 of its potential returns per unit of risk. Geratherm Medical AG is currently generating about -0.11 per unit of risk. If you would invest 8,373 in Medtronic PLC on August 28, 2024 and sell it today you would lose (280.00) from holding Medtronic PLC or give up 3.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medtronic PLC vs. Geratherm Medical AG
Performance |
| Timeline |
| Medtronic PLC |
| Geratherm Medical |
Medtronic PLC and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medtronic PLC and Geratherm Medical
The main advantage of trading using opposite Medtronic PLC and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medtronic PLC position performs unexpectedly, Geratherm Medical 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 Geratherm Medical will offset losses from the drop in Geratherm Medical's long position.| Medtronic PLC vs. Vulcan Materials | Medtronic PLC vs. United States Steel | Medtronic PLC vs. Plastic Omnium | Medtronic PLC vs. Sumitomo Rubber Industries |
| Geratherm Medical vs. Superior Plus Corp | Geratherm Medical vs. NMI Holdings | Geratherm Medical vs. Origin Agritech | Geratherm Medical 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 CEOs Directory module to screen CEOs from public companies around the world.
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