Correlation Between Medtronic and Mimedx

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

Diversification Opportunities for Medtronic and Mimedx

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between Medtronic and Mimedx is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Medtronic and Mimedx Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mimedx Group and Medtronic 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 Medtronic are associated (or correlated) with Mimedx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mimedx Group has no effect on the direction of Medtronic i.e., Medtronic and Mimedx go up and down completely randomly.

Pair Corralation between Medtronic and Mimedx

Considering the 90-day investment horizon Medtronic is expected to generate 4.67 times less return on investment than Mimedx. But when comparing it to its historical volatility, Medtronic is 3.35 times less risky than Mimedx. It trades about 0.01 of its potential returns per unit of risk. Mimedx Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  500.00  in Mimedx Group on April 3, 2022 and sell it today you would lose (143.00)  from holding Mimedx Group or give up 28.6% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Medtronic  vs.  Mimedx Group

 Performance (%) 
      Timeline 
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 unsteady performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in August 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0308
Payout Ratio
0.46
Last Split Factor
2:1
Forward Annual Dividend Rate
2.72
Dividend Date
2022-07-15
Ex Dividend Date
2022-06-23
Last Split Date
1999-09-27

Medtronic Price Channel

Mimedx Group 
Mimedx Performance
0 of 100
Over the last 90 days Mimedx Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in August 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Structure and Payout Changes

Last Split Factor
3235:10000
Last Split Date
2008-04-02

Mimedx Price Channel

Medtronic and Mimedx Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Medtronic and Mimedx

The main advantage of trading using opposite Medtronic and Mimedx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medtronic position performs unexpectedly, Mimedx 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 Mimedx will offset losses from the drop in Mimedx's long position.
The idea behind Medtronic and Mimedx Group 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.
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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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