Correlation Between Medtronic PLC and Vivos

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

By analyzing existing cross correlation between Medtronic PLC and Vivos Inc, you can compare the effects of market volatilities on Medtronic PLC and Vivos 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 Vivos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medtronic PLC and Vivos.

Diversification Opportunities for Medtronic PLC and Vivos

0.74

Correlation Coefficient

Medtronic PLC  Vivos

Poor diversification

The 3 months correlation between Medtronic and Vivos is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Medtronic PLC and Vivos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivos Inc 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 Vivos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivos Inc has no effect on the direction of Medtronic PLC i.e., Medtronic PLC and Vivos go up and down completely randomly.

Pair Corralation between Medtronic PLC and Vivos

Considering the 90-day investment horizon Medtronic PLC is expected to under-perform the Vivos. But the stock apears to be less risky and, when comparing its historical volatility, Medtronic PLC is 7.67 times less risky than Vivos. The stock trades about -0.43 of its potential returns per unit of risk. The Vivos Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  8.50  in Vivos Inc on September 23, 2024 and sell it today you would earn a total of  0.30  from holding Vivos Inc or generate 3.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Medtronic PLC  vs.  Vivos Inc

Medtronic PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medtronic PLC 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.

Vivos Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vivos Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Medtronic PLC and Vivos

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

The idea behind Medtronic PLC and Vivos Inc 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 Stocks Directory module to find actively traded stocks across global markets.