Correlation Between ZimVie and Stryker
Can any of the company-specific risk be diversified away by investing in both ZimVie 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 ZimVie and Stryker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZimVie Inc and Stryker, you can compare the effects of market volatilities on ZimVie 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 ZimVie with a short position of Stryker. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZimVie and Stryker.
Diversification Opportunities for ZimVie and Stryker
Excellent diversification
The 3 months correlation between ZimVie and Stryker is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding ZimVie Inc and Stryker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryker and ZimVie 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 ZimVie Inc 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 ZimVie i.e., ZimVie and Stryker go up and down completely randomly.
Pair Corralation between ZimVie and Stryker
Given the investment horizon of 90 days ZimVie Inc is expected to under-perform the Stryker. In addition to that, ZimVie is 1.21 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 36,324 in Stryker on August 24, 2024 and sell it today you would earn a total of 2,690 from holding Stryker or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZimVie Inc vs. Stryker
Performance |
| Timeline |
| ZimVie Inc |
| Stryker |
ZimVie and Stryker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZimVie and Stryker
The main advantage of trading using opposite ZimVie and Stryker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZimVie 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.| ZimVie vs. Stryker | ZimVie vs. Boston Scientific Corp | ZimVie vs. STERIS plc | ZimVie vs. Smith Nephew SNATS |
| Stryker vs. Boston Scientific Corp | Stryker vs. Abbott Laboratories | Stryker vs. Medtronic PLC | Stryker vs. DexCom 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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