Correlation Between GN Store and Medtronic PLC
Can any of the company-specific risk be diversified away by investing in both GN Store 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 GN Store and Medtronic PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GN Store Nord and Medtronic PLC, you can compare the effects of market volatilities on GN Store 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 GN Store with a short position of Medtronic PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GN Store and Medtronic PLC.
Diversification Opportunities for GN Store and Medtronic PLC
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GGNDF and Medtronic is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding GN Store Nord and Medtronic PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medtronic PLC and GN Store 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 GN Store Nord 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 GN Store i.e., GN Store and Medtronic PLC go up and down completely randomly.
Pair Corralation between GN Store and Medtronic PLC
Assuming the 90 days horizon GN Store Nord is expected to under-perform the Medtronic PLC. In addition to that, GN Store is 2.32 times more volatile than Medtronic PLC. It trades about -0.12 of its total potential returns per unit of risk. Medtronic PLC is currently generating about 0.04 per unit of volatility. If you would invest 7,714 in Medtronic PLC on January 14, 2025 and sell it today you would earn a total of 650.00 from holding Medtronic PLC or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
GN Store Nord vs. Medtronic PLC
Performance |
| Timeline |
| GN Store Nord |
| Medtronic PLC |
GN Store and Medtronic PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GN Store and Medtronic PLC
The main advantage of trading using opposite GN Store and Medtronic PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GN Store 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.| GN Store vs. Rapid Therapeutic Science | GN Store vs. Bioelectronics Corp | GN Store vs. InspireMD | GN Store vs. Aquagold International |
| Medtronic PLC vs. Edwards Lifesciences Corp | Medtronic PLC vs. Abbott Laboratories | Medtronic PLC vs. Boston Scientific Corp | Medtronic PLC vs. Zimmer Biomet Holdings |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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