Correlation Between EPSILON HEALTHCARE and Medtronic PLC
Can any of the company-specific risk be diversified away by investing in both EPSILON HEALTHCARE and Medtronic PLC 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 EPSILON HEALTHCARE and Medtronic PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPSILON HEALTHCARE LTD and Medtronic PLC, you can compare the effects of market volatilities on EPSILON HEALTHCARE and Medtronic PLC 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 EPSILON HEALTHCARE with a short position of Medtronic PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPSILON HEALTHCARE and Medtronic PLC.
Diversification Opportunities for EPSILON HEALTHCARE and Medtronic PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EPSILON and Medtronic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPSILON HEALTHCARE LTD and Medtronic PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medtronic PLC and EPSILON HEALTHCARE 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 EPSILON HEALTHCARE LTD are associated (or correlated) with Medtronic PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medtronic PLC has no effect on the direction of EPSILON HEALTHCARE i.e., EPSILON HEALTHCARE and Medtronic PLC go up and down completely randomly.
Pair Corralation between EPSILON HEALTHCARE and Medtronic PLC
Assuming the 90 days trading horizon EPSILON HEALTHCARE LTD is expected to generate 11.81 times more return on investment than Medtronic PLC. However, EPSILON HEALTHCARE is 11.81 times more volatile than Medtronic PLC. It trades about 0.05 of its potential returns per unit of risk. Medtronic PLC is currently generating about 0.03 per unit of risk. If you would invest 0.95 in EPSILON HEALTHCARE LTD on September 13, 2024 and sell it today you would lose (0.20) from holding EPSILON HEALTHCARE LTD or give up 21.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
EPSILON HEALTHCARE LTD vs. Medtronic PLC
Performance |
| Timeline |
| EPSILON HEALTHCARE LTD |
| Medtronic PLC |
EPSILON HEALTHCARE and Medtronic PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPSILON HEALTHCARE and Medtronic PLC
The main advantage of trading using opposite EPSILON HEALTHCARE and Medtronic PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPSILON HEALTHCARE position performs unexpectedly, Medtronic PLC 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 Medtronic PLC will offset losses from the drop in Medtronic PLC's long position.| EPSILON HEALTHCARE vs. Merck Company | EPSILON HEALTHCARE vs. Elanco Animal Health | EPSILON HEALTHCARE vs. Superior Plus Corp | EPSILON HEALTHCARE vs. NMI Holdings |
| Medtronic PLC vs. GUARDANT HEALTH CL | Medtronic PLC vs. EPSILON HEALTHCARE LTD | Medtronic PLC vs. MEDICAL FACILITIES NEW | Medtronic PLC vs. DiamondRock Hospitality |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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