Correlation Between Medtronic PLC and Carnegie Clean
Can any of the company-specific risk be diversified away by investing in both Medtronic PLC and Carnegie Clean 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 Carnegie Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medtronic PLC and Carnegie Clean Energy, you can compare the effects of market volatilities on Medtronic PLC and Carnegie Clean 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 Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medtronic PLC and Carnegie Clean.
Diversification Opportunities for Medtronic PLC and Carnegie Clean
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Medtronic and Carnegie is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Medtronic PLC and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy 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 Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of Medtronic PLC i.e., Medtronic PLC and Carnegie Clean go up and down completely randomly.
Pair Corralation between Medtronic PLC and Carnegie Clean
Assuming the 90 days trading horizon Medtronic PLC is expected to generate 0.25 times more return on investment than Carnegie Clean. However, Medtronic PLC is 4.06 times less risky than Carnegie Clean. It trades about 0.04 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about -0.03 per unit of risk. If you would invest 7,302 in Medtronic PLC on September 12, 2024 and sell it today you would earn a total of 647.00 from holding Medtronic PLC or generate 8.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Medtronic PLC vs. Carnegie Clean Energy
Performance |
| Timeline |
| Medtronic PLC |
| Carnegie Clean Energy |
Medtronic PLC and Carnegie Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medtronic PLC and Carnegie Clean
The main advantage of trading using opposite Medtronic PLC and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medtronic PLC position performs unexpectedly, Carnegie Clean 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 Carnegie Clean will offset losses from the drop in Carnegie Clean's long position.| Medtronic PLC vs. Carnegie Clean Energy | Medtronic PLC vs. Singapore Airlines Limited | Medtronic PLC vs. AM EAGLE OUTFITTERS | Medtronic PLC vs. Global Ship Lease |
| Carnegie Clean vs. Superior Plus Corp | Carnegie Clean vs. SIVERS SEMICONDUCTORS AB | Carnegie Clean vs. Norsk Hydro ASA | Carnegie Clean vs. Reliance Steel Aluminum |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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