Correlation Between Medtronic PLC and SurModics
Can any of the company-specific risk be diversified away by investing in both Medtronic PLC and SurModics 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 SurModics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medtronic PLC and SurModics, you can compare the effects of market volatilities on Medtronic PLC and SurModics 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 SurModics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medtronic PLC and SurModics.
Diversification Opportunities for Medtronic PLC and SurModics
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medtronic and SurModics is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Medtronic PLC and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics 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 SurModics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SurModics has no effect on the direction of Medtronic PLC i.e., Medtronic PLC and SurModics go up and down completely randomly.
Pair Corralation between Medtronic PLC and SurModics
Considering the 90-day investment horizon Medtronic PLC is expected to under-perform the SurModics. In addition to that, Medtronic PLC is 1.5 times more volatile than SurModics. It trades about -0.2 of its total potential returns per unit of risk. SurModics is currently generating about 0.18 per unit of volatility. If you would invest 3,813 in SurModics on August 25, 2024 and sell it today you would earn a total of 120.00 from holding SurModics or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medtronic PLC vs. SurModics
Performance |
| Timeline |
| Medtronic PLC |
| SurModics |
Medtronic PLC and SurModics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medtronic PLC and SurModics
The main advantage of trading using opposite Medtronic PLC and SurModics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medtronic PLC position performs unexpectedly, SurModics 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 SurModics will offset losses from the drop in SurModics' 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 |
| SurModics vs. LivaNova PLC | SurModics vs. Electromed | SurModics vs. Orthopediatrics Corp | SurModics vs. Neuropace |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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