Correlation Between ResMed and MultiPlan
Can any of the company-specific risk be diversified away by investing in both ResMed and MultiPlan 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 ResMed and MultiPlan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ResMed Inc and MultiPlan, you can compare the effects of market volatilities on ResMed and MultiPlan 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 ResMed with a short position of MultiPlan. Check out your portfolio center. Please also check ongoing floating volatility patterns of ResMed and MultiPlan.
Diversification Opportunities for ResMed and MultiPlan
Good diversification
The 3 months correlation between ResMed and MultiPlan is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ResMed Inc and MultiPlan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MultiPlan and ResMed 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 ResMed Inc are associated (or correlated) with MultiPlan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MultiPlan has no effect on the direction of ResMed i.e., ResMed and MultiPlan go up and down completely randomly.
Pair Corralation between ResMed and MultiPlan
Considering the 90-day investment horizon ResMed Inc is expected to generate 0.23 times more return on investment than MultiPlan. However, ResMed Inc is 4.39 times less risky than MultiPlan. It trades about 0.09 of its potential returns per unit of risk. MultiPlan is currently generating about -0.05 per unit of risk. If you would invest 23,179 in ResMed Inc on September 5, 2024 and sell it today you would earn a total of 1,405 from holding ResMed Inc or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ResMed Inc vs. MultiPlan
Performance |
| Timeline |
| ResMed Inc |
| MultiPlan |
ResMed and MultiPlan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ResMed and MultiPlan
The main advantage of trading using opposite ResMed and MultiPlan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ResMed position performs unexpectedly, MultiPlan 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 MultiPlan will offset losses from the drop in MultiPlan's long position.| ResMed vs. Teleflex Incorporated | ResMed vs. West Pharmaceutical Services | ResMed vs. Alcon AG | ResMed vs. ICU Medical |
| MultiPlan vs. Baxter International | MultiPlan vs. West Pharmaceutical Services | MultiPlan vs. ResMed Inc | MultiPlan vs. ICU Medical |
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 CEOs Directory module to screen CEOs from public companies around the world.
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