Correlation Between Medtronic PLC and Stryker
Can any of the company-specific risk be diversified away by investing in both Medtronic PLC and Stryker 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 Stryker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medtronic PLC and Stryker, you can compare the effects of market volatilities on Medtronic PLC 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 Medtronic PLC with a short position of Stryker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medtronic PLC and Stryker.
Diversification Opportunities for Medtronic PLC and Stryker
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medtronic and Stryker is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Medtronic PLC and Stryker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryker 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 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 has no effect on the direction of Medtronic PLC i.e., Medtronic PLC and Stryker go up and down completely randomly.
Pair Corralation between Medtronic PLC and Stryker
Considering the 90-day investment horizon Medtronic PLC is expected to under-perform the Stryker. In addition to that, Medtronic PLC is 1.0 times more volatile than Stryker. It trades about -0.21 of its total potential returns per unit of risk. Stryker is currently generating about 0.31 per unit of volatility. If you would invest 35,601 in Stryker on August 28, 2024 and sell it today you would earn a total of 2,890 from holding Stryker or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medtronic PLC vs. Stryker
Performance |
| Timeline |
| Medtronic PLC |
| Stryker |
Medtronic PLC and Stryker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medtronic PLC and Stryker
The main advantage of trading using opposite Medtronic PLC and Stryker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medtronic PLC 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.| Medtronic PLC vs. Edwards Lifesciences Corp | Medtronic PLC vs. Abbott Laboratories | Medtronic PLC vs. Boston Scientific Corp | Medtronic PLC vs. Zimmer Biomet Holdings |
| Stryker vs. Heartbeam | Stryker vs. EUDA Health Holdings | Stryker vs. Nutex Health | Stryker vs. Healthcare Triangle |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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