Correlation Between Ecgi Holdings and Medtronic

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Can any of the company-specific risk be diversified away by investing in both Ecgi Holdings and Medtronic 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 Ecgi Holdings and Medtronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecgi Holdings and Medtronic, you can compare the effects of market volatilities on Ecgi Holdings and Medtronic 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 Ecgi Holdings with a short position of Medtronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecgi Holdings and Medtronic.

Diversification Opportunities for Ecgi Holdings and Medtronic

-0.45
  Correlation Coefficient

Very good diversification

The 3 months correlation between Ecgi Holdings and Medtronic is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ecgi Holdings and Medtronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medtronic and Ecgi Holdings 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 Ecgi Holdings are associated (or correlated) with Medtronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medtronic has no effect on the direction of Ecgi Holdings i.e., Ecgi Holdings and Medtronic go up and down completely randomly.

Pair Corralation between Ecgi Holdings and Medtronic

Given the investment horizon of 90 days Ecgi Holdings is expected to under-perform the Medtronic. In addition to that, Ecgi Holdings is 6.31 times more volatile than Medtronic. It trades about -0.27 of its total potential returns per unit of risk. Medtronic is currently generating about 0.42 per unit of volatility. If you would invest  8,790  in Medtronic on May 17, 2022 and sell it today you would earn a total of  729.00  from holding Medtronic or generate 8.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Ecgi Holdings  vs.  Medtronic

 Performance (%) 
       Timeline  
Ecgi Holdings 
Ecgi Holdings Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Ecgi Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Ecgi Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Ecgi Holdings Price Channel

Medtronic 
Medtronic Performance
0 of 100
Over the last 90 days Medtronic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Medtronic Price Channel

Ecgi Holdings and Medtronic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ecgi Holdings and Medtronic

The main advantage of trading using opposite Ecgi Holdings and Medtronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecgi Holdings position performs unexpectedly, Medtronic 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 will offset losses from the drop in Medtronic's long position.
The idea behind Ecgi Holdings and Medtronic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Medtronic

Pair trading matchups for Medtronic

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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