Correlation Between Penumbra and Medtronic PLC
Can any of the company-specific risk be diversified away by investing in both Penumbra 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 Penumbra and Medtronic PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penumbra and Medtronic PLC, you can compare the effects of market volatilities on Penumbra 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 Penumbra with a short position of Medtronic PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penumbra and Medtronic PLC.
Diversification Opportunities for Penumbra and Medtronic PLC
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Penumbra and Medtronic is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Penumbra and Medtronic PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medtronic PLC and Penumbra 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 Penumbra 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 Penumbra i.e., Penumbra and Medtronic PLC go up and down completely randomly.
Pair Corralation between Penumbra and Medtronic PLC
Considering the 90-day investment horizon Penumbra is expected to generate 2.19 times more return on investment than Medtronic PLC. However, Penumbra is 2.19 times more volatile than Medtronic PLC. It trades about 0.13 of its potential returns per unit of risk. Medtronic PLC is currently generating about -0.02 per unit of risk. If you would invest 20,497 in Penumbra on September 3, 2024 and sell it today you would earn a total of 3,915 from holding Penumbra or generate 19.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penumbra vs. Medtronic PLC
Performance |
| Timeline |
| Penumbra |
| Medtronic PLC |
Penumbra and Medtronic PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penumbra and Medtronic PLC
The main advantage of trading using opposite Penumbra and Medtronic PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penumbra 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.| Penumbra vs. Insulet | Penumbra vs. TransMedics Group | Penumbra vs. Masimo | Penumbra vs. Inspire Medical Systems |
| Medtronic PLC vs. Tandem Diabetes Care | Medtronic PLC vs. Inspire Medical Systems | Medtronic PLC vs. Penumbra | Medtronic PLC vs. Insulet |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |