Correlation Between STERIS Plc and Stryker
Can any of the company-specific risk be diversified away by investing in both STERIS 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 STERIS Plc and Stryker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STERIS plc and Stryker, you can compare the effects of market volatilities on STERIS 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 STERIS Plc with a short position of Stryker. Check out your portfolio center. Please also check ongoing floating volatility patterns of STERIS Plc and Stryker.
Diversification Opportunities for STERIS Plc and Stryker
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STERIS and Stryker is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding STERIS plc and Stryker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryker and STERIS 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 STERIS 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 STERIS Plc i.e., STERIS Plc and Stryker go up and down completely randomly.
Pair Corralation between STERIS Plc and Stryker
Considering the 90-day investment horizon STERIS plc is expected to under-perform the Stryker. In addition to that, STERIS Plc is 1.25 times more volatile than Stryker. It trades about -0.08 of its total potential returns per unit of risk. Stryker is currently generating about 0.25 per unit of volatility. If you would invest 36,343 in Stryker on August 31, 2024 and sell it today you would earn a total of 2,471 from holding Stryker or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STERIS plc vs. Stryker
Performance |
| Timeline |
| STERIS plc |
| Stryker |
STERIS Plc and Stryker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STERIS Plc and Stryker
The main advantage of trading using opposite STERIS Plc and Stryker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STERIS 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.| STERIS Plc vs. Abbott Laboratories | STERIS Plc vs. Medtronic PLC | STERIS Plc vs. Edwards Lifesciences Corp | STERIS Plc vs. ZimVie Inc |
| Stryker vs. Abbott Laboratories | Stryker vs. Medtronic PLC | Stryker vs. Edwards Lifesciences Corp | Stryker vs. ZimVie Inc |
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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