Correlation Between Medtronic PLC and Icad
Can any of the company-specific risk be diversified away by investing in both Medtronic PLC and Icad 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 Icad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medtronic PLC and icad inc, you can compare the effects of market volatilities on Medtronic PLC and Icad 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 Icad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medtronic PLC and Icad.
Diversification Opportunities for Medtronic PLC and Icad
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Medtronic and Icad is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Medtronic PLC and icad inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on icad inc 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 Icad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of icad inc has no effect on the direction of Medtronic PLC i.e., Medtronic PLC and Icad go up and down completely randomly.
Pair Corralation between Medtronic PLC and Icad
Considering the 90-day investment horizon Medtronic PLC is expected to generate 8.63 times less return on investment than Icad. But when comparing it to its historical volatility, Medtronic PLC is 5.6 times less risky than Icad. It trades about 0.03 of its potential returns per unit of risk. icad inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 128.00 in icad inc on August 31, 2024 and sell it today you would earn a total of 45.00 from holding icad inc or generate 35.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medtronic PLC vs. icad inc
Performance |
| Timeline |
| Medtronic PLC |
| icad inc |
Medtronic PLC and Icad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medtronic PLC and Icad
The main advantage of trading using opposite Medtronic PLC and Icad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medtronic PLC position performs unexpectedly, Icad 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 Icad will offset losses from the drop in Icad's long position.| 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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