Correlation Between Medtronic PLC and Odyssey Group

Can any of the company-specific risk be diversified away by investing in both Medtronic PLC and Odyssey Group 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 PLC and Odyssey Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Medtronic PLC and Odyssey Group International, you can compare the effects of market volatilities on Medtronic PLC and Odyssey Group 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 PLC with a short position of Odyssey Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medtronic PLC and Odyssey Group.

Diversification Opportunities for Medtronic PLC and Odyssey Group

-0.83

Correlation Coefficient

Medtronic PLC  Odyssey Group

Pay attention - limited upside

The 3 months correlation between Medtronic and Odyssey is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Medtronic PLC and Odyssey Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssey Group Intern and Medtronic PLC 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 PLC are associated (or correlated) with Odyssey Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssey Group Intern has no effect on the direction of Medtronic PLC i.e., Medtronic PLC and Odyssey Group go up and down completely randomly.

Pair Corralation between Medtronic PLC and Odyssey Group

Considering the 90-day investment horizon Medtronic PLC is expected to generate 0.21 times more return on investment than Odyssey Group. However, Medtronic PLC is 4.8 times less risky than Odyssey Group. It trades about 0.14 of its potential returns per unit of risk. Odyssey Group International is currently generating about -0.19 per unit of risk. If you would invest  8,070  in Medtronic PLC on December 21, 2024 and sell it today you would earn a total of  1,052  from holding Medtronic PLC or generate 13.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Medtronic PLC  vs.  Odyssey Group International

Medtronic PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Medtronic PLC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Medtronic PLC unveiled solid returns over the last few months and may actually be approaching a breakup point.

Odyssey Group Intern

Risk-Adjusted Performance

Very Weak

Over the last 90 days Odyssey Group International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Medtronic PLC and Odyssey Group

The main advantage of trading using opposite Medtronic PLC and Odyssey Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medtronic PLC position performs unexpectedly, Odyssey Group 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 Odyssey Group will offset losses from the drop in Odyssey Group's long position.

The idea behind Medtronic PLC and Odyssey Group International 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.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.