Correlation Between TransMedics and Stryker
Can any of the company-specific risk be diversified away by investing in both TransMedics 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 TransMedics and Stryker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TransMedics Group and Stryker, you can compare the effects of market volatilities on TransMedics 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 TransMedics with a short position of Stryker. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransMedics and Stryker.
Diversification Opportunities for TransMedics and Stryker
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TransMedics and Stryker is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding TransMedics Group and Stryker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryker and TransMedics 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 TransMedics Group 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 TransMedics i.e., TransMedics and Stryker go up and down completely randomly.
Pair Corralation between TransMedics and Stryker
Given the investment horizon of 90 days TransMedics Group is expected to under-perform the Stryker. In addition to that, TransMedics is 6.11 times more volatile than Stryker. It trades about -0.26 of its total potential returns per unit of risk. Stryker is currently generating about 0.31 per unit of volatility. If you would invest 35,601 in Stryker on August 27, 2024 and sell it today you would earn a total of 2,890 from holding Stryker or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TransMedics Group vs. Stryker
Performance |
| Timeline |
| TransMedics Group |
| Stryker |
TransMedics and Stryker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TransMedics and Stryker
The main advantage of trading using opposite TransMedics and Stryker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TransMedics 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.| TransMedics vs. Inspire Medical Systems | TransMedics vs. Inari Medical | TransMedics vs. InMode | TransMedics vs. Insulet |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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