Correlation Between Stryker and Avita Medical
Can any of the company-specific risk be diversified away by investing in both Stryker and Avita Medical 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 Stryker and Avita Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stryker and Avita Medical, you can compare the effects of market volatilities on Stryker and Avita Medical 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 Stryker with a short position of Avita Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stryker and Avita Medical.
Diversification Opportunities for Stryker and Avita Medical
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stryker and Avita is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Stryker and Avita Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avita Medical and Stryker 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 Stryker are associated (or correlated) with Avita Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avita Medical has no effect on the direction of Stryker i.e., Stryker and Avita Medical go up and down completely randomly.
Pair Corralation between Stryker and Avita Medical
Considering the 90-day investment horizon Stryker is expected to generate 0.26 times more return on investment than Avita Medical. However, Stryker is 3.86 times less risky than Avita Medical. It trades about 0.07 of its potential returns per unit of risk. Avita Medical is currently generating about -0.16 per unit of risk. If you would invest 31,255 in Stryker on January 20, 2024 and sell it today you would earn a total of 1,490 from holding Stryker or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stryker vs. Avita Medical
Performance |
| Timeline |
| Stryker |
| Avita Medical |
Stryker and Avita Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stryker and Avita Medical
The main advantage of trading using opposite Stryker and Avita Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stryker position performs unexpectedly, Avita Medical 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 Avita Medical will offset losses from the drop in Avita Medical's long position.| Stryker vs. Agilent Technologies | Stryker vs. Illumina | Stryker vs. Waters | Stryker vs. Thermo Fisher Scientific |
| Avita Medical vs. Telesis Bio | Avita Medical vs. Clearpoint Neuro | Avita Medical vs. Sight Sciences | Avita Medical vs. Treace Medical Concepts |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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