Correlation Between Stryker and STERIS Plc
Can any of the company-specific risk be diversified away by investing in both Stryker and STERIS 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 Stryker and STERIS Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stryker and STERIS plc, you can compare the effects of market volatilities on Stryker and STERIS 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 Stryker with a short position of STERIS Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stryker and STERIS Plc.
Diversification Opportunities for Stryker and STERIS Plc
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stryker and STERIS is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Stryker and STERIS plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STERIS plc and Stryker 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 Stryker are associated (or correlated) with STERIS Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STERIS plc has no effect on the direction of Stryker i.e., Stryker and STERIS Plc go up and down completely randomly.
Pair Corralation between Stryker and STERIS Plc
Considering the 90-day investment horizon Stryker is expected to generate 0.97 times more return on investment than STERIS Plc. However, Stryker is 1.03 times less risky than STERIS Plc. It trades about 0.08 of its potential returns per unit of risk. STERIS plc is currently generating about 0.02 per unit of risk. If you would invest 27,386 in Stryker on August 27, 2024 and sell it today you would earn a total of 11,099 from holding Stryker or generate 40.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stryker vs. STERIS plc
Performance |
| Timeline |
| Stryker |
| STERIS plc |
Stryker and STERIS Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stryker and STERIS Plc
The main advantage of trading using opposite Stryker and STERIS Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stryker position performs unexpectedly, STERIS 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 STERIS Plc will offset losses from the drop in STERIS Plc's long position.| Stryker vs. Heartbeam | Stryker vs. EUDA Health Holdings | Stryker vs. Nutex Health | Stryker vs. Healthcare Triangle |
| STERIS Plc vs. Orthofix Medical | STERIS Plc vs. Glaukos Corp | STERIS Plc vs. Bruker | STERIS Plc vs. CONMED |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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