Correlation Between Escalon Medical and Medtronic PLC
Can any of the company-specific risk be diversified away by investing in both Escalon Medical and Medtronic 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 Escalon Medical and Medtronic PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Escalon Medical Corp and Medtronic PLC, you can compare the effects of market volatilities on Escalon Medical and Medtronic 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 Escalon Medical with a short position of Medtronic PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Escalon Medical and Medtronic PLC.
Diversification Opportunities for Escalon Medical and Medtronic PLC
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Escalon and Medtronic is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Escalon Medical Corp and Medtronic PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medtronic PLC and Escalon Medical 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 Escalon Medical Corp are associated (or correlated) with Medtronic PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medtronic PLC has no effect on the direction of Escalon Medical i.e., Escalon Medical and Medtronic PLC go up and down completely randomly.
Pair Corralation between Escalon Medical and Medtronic PLC
If you would invest 6.00 in Escalon Medical Corp on January 25, 2024 and sell it today you would earn a total of 0.00 from holding Escalon Medical Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Escalon Medical Corp vs. Medtronic PLC
Performance |
| Timeline |
| Escalon Medical Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Medtronic PLC |
Escalon Medical and Medtronic PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Escalon Medical and Medtronic PLC
The main advantage of trading using opposite Escalon Medical and Medtronic PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Escalon Medical position performs unexpectedly, Medtronic 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 Medtronic PLC will offset losses from the drop in Medtronic PLC's long position.| Escalon Medical vs. HireRight Holdings Corp | Escalon Medical vs. Dynatronics | Escalon Medical vs. IRIDEX | Escalon Medical vs. Lifeway Foods |
| Medtronic PLC vs. HealthStream | Medtronic PLC vs. National Research Corp | Medtronic PLC vs. HealthEquity | Medtronic PLC vs. Health Catalyst |
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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