Correlation Between Penumbra and Stryker
Can any of the company-specific risk be diversified away by investing in both Penumbra 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 Penumbra and Stryker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penumbra and Stryker, you can compare the effects of market volatilities on Penumbra 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 Penumbra with a short position of Stryker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penumbra and Stryker.
Diversification Opportunities for Penumbra and Stryker
Poor diversification
The 3 months correlation between Penumbra and Stryker is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Penumbra and Stryker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryker 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 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 Penumbra i.e., Penumbra and Stryker go up and down completely randomly.
Pair Corralation between Penumbra and Stryker
Considering the 90-day investment horizon Penumbra is expected to generate 5.16 times less return on investment than Stryker. In addition to that, Penumbra is 1.98 times more volatile than Stryker. It trades about 0.01 of its total potential returns per unit of risk. Stryker is currently generating about 0.07 per unit of volatility. If you would invest 26,676 in Stryker on August 27, 2024 and sell it today you would earn a total of 11,809 from holding Stryker or generate 44.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penumbra vs. Stryker
Performance |
| Timeline |
| Penumbra |
| Stryker |
Penumbra and Stryker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penumbra and Stryker
The main advantage of trading using opposite Penumbra and Stryker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penumbra 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.| Penumbra vs. Insulet | Penumbra vs. TransMedics Group | Penumbra vs. Masimo | Penumbra vs. Inspire Medical Systems |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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