Correlation Between Medtronic PLC and Apple
Can any of the company-specific risk be diversified away by investing in both Medtronic PLC and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medtronic PLC and Apple Inc, you can compare the effects of market volatilities on Medtronic PLC and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medtronic PLC and Apple.
Diversification Opportunities for Medtronic PLC and Apple
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medtronic and Apple is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Medtronic PLC and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Medtronic PLC i.e., Medtronic PLC and Apple go up and down completely randomly.
Pair Corralation between Medtronic PLC and Apple
Assuming the 90 days trading horizon Medtronic PLC is expected to under-perform the Apple. In addition to that, Medtronic PLC is 1.15 times more volatile than Apple Inc. It trades about -0.02 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.01 per unit of volatility. If you would invest 22,845 in Apple Inc on December 1, 2024 and sell it today you would earn a total of 30.00 from holding Apple Inc or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Medtronic PLC vs. Apple Inc
Performance |
| Timeline |
| Medtronic PLC |
| Apple Inc |
Medtronic PLC and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medtronic PLC and Apple
The main advantage of trading using opposite Medtronic PLC and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medtronic PLC position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Medtronic PLC vs. Gaztransport et technigaz | Medtronic PLC vs. BII Railway Transportation | Medtronic PLC vs. Caseys General Stores | Medtronic PLC vs. PICKN PAY STORES |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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