Correlation Between Medtronic PLC and Ingen Technologies

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

Diversification Opportunities for Medtronic PLC and Ingen Technologies

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Medtronic and Ingen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Medtronic PLC and Ingen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingen Technologies 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 Ingen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingen Technologies has no effect on the direction of Medtronic PLC i.e., Medtronic PLC and Ingen Technologies go up and down completely randomly.

Pair Corralation between Medtronic PLC and Ingen Technologies

Considering the 90-day investment horizon Medtronic PLC is expected to under-perform the Ingen Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Medtronic PLC is 98.21 times less risky than Ingen Technologies. The stock trades about -0.02 of its potential returns per unit of risk. The Ingen Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Ingen Technologies on December 29, 2023 and sell it today you would lose (0.01) from holding Ingen Technologies or give up 100.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Medtronic PLC  vs.  Ingen Technologies

 Performance 
       Timeline  
Medtronic PLC 

Risk-Adjusted Performance

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OK
Compared to the overall equity markets, risk-adjusted returns on investments in Medtronic PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal fundamental indicators, Medtronic PLC may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Ingen Technologies 

Risk-Adjusted Performance

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Over the last 90 days Ingen Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ingen Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Medtronic PLC and Ingen Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Medtronic PLC and Ingen Technologies

The main advantage of trading using opposite Medtronic PLC and Ingen Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medtronic PLC position performs unexpectedly, Ingen Technologies 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 Ingen Technologies will offset losses from the drop in Ingen Technologies' long position.
The idea behind Medtronic PLC and Ingen Technologies 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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