Correlation Between Masimo and Medtronic PLC
Can any of the company-specific risk be diversified away by investing in both Masimo 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 Masimo and Medtronic PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Masimo and Medtronic PLC, you can compare the effects of market volatilities on Masimo 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 Masimo with a short position of Medtronic PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masimo and Medtronic PLC.
Diversification Opportunities for Masimo and Medtronic PLC
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Masimo and Medtronic is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Masimo and Medtronic PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medtronic PLC and Masimo 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 Masimo 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 Masimo i.e., Masimo and Medtronic PLC go up and down completely randomly.
Pair Corralation between Masimo and Medtronic PLC
Given the investment horizon of 90 days Masimo is expected to generate 2.15 times more return on investment than Medtronic PLC. However, Masimo is 2.15 times more volatile than Medtronic PLC. It trades about 0.44 of its potential returns per unit of risk. Medtronic PLC is currently generating about -0.21 per unit of risk. If you would invest 14,071 in Masimo on August 27, 2024 and sell it today you would earn a total of 3,699 from holding Masimo or generate 26.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Masimo vs. Medtronic PLC
Performance |
| Timeline |
| Masimo |
| Medtronic PLC |
Masimo and Medtronic PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Masimo and Medtronic PLC
The main advantage of trading using opposite Masimo and Medtronic PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masimo 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.| Masimo vs. Heartbeam | Masimo vs. EUDA Health Holdings | Masimo vs. Nutex Health | Masimo vs. Healthcare Triangle |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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