Correlation Between Cars and STRYKER
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By analyzing existing cross correlation between Cars Inc and STRYKER P 4375, you can compare the effects of market volatilities on Cars and STRYKER 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 Cars with a short position of STRYKER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and STRYKER.
Diversification Opportunities for Cars and STRYKER
Very good diversification
The 3 months correlation between Cars and STRYKER is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc and STRYKER P 4375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRYKER P 4375 and Cars 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 Cars Inc are associated (or correlated) with STRYKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRYKER P 4375 has no effect on the direction of Cars i.e., Cars and STRYKER go up and down completely randomly.
Pair Corralation between Cars and STRYKER
Given the investment horizon of 90 days Cars Inc is expected to generate 1.74 times more return on investment than STRYKER. However, Cars is 1.74 times more volatile than STRYKER P 4375. It trades about 0.44 of its potential returns per unit of risk. STRYKER P 4375 is currently generating about 0.74 per unit of risk. If you would invest 1,603 in Cars Inc on September 2, 2024 and sell it today you would earn a total of 384.00 from holding Cars Inc or generate 23.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 23.81% |
| Values | Daily Returns |
Cars Inc vs. STRYKER P 4375
Performance |
| Timeline |
| Cars Inc |
| STRYKER P 4375 |
Cars and STRYKER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cars and STRYKER
The main advantage of trading using opposite Cars and STRYKER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars position performs unexpectedly, STRYKER 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 STRYKER will offset losses from the drop in STRYKER's long position.The idea behind Cars Inc and STRYKER P 4375 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| STRYKER vs. AEP TEX INC | STRYKER vs. US BANK NATIONAL | STRYKER vs. Bank of America | STRYKER vs. GE Aerospace |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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