Correlation Between HMM and MedPacto
Can any of the company-specific risk be diversified away by investing in both HMM and MedPacto 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 HMM and MedPacto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMM Co and MedPacto, you can compare the effects of market volatilities on HMM and MedPacto 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 HMM with a short position of MedPacto. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMM and MedPacto.
Diversification Opportunities for HMM and MedPacto
Very good diversification
The 3 months correlation between HMM and MedPacto is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding HMM Co and MedPacto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MedPacto and HMM 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 HMM Co are associated (or correlated) with MedPacto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MedPacto has no effect on the direction of HMM i.e., HMM and MedPacto go up and down completely randomly.
Pair Corralation between HMM and MedPacto
Assuming the 90 days trading horizon HMM Co is expected to generate 0.79 times more return on investment than MedPacto. However, HMM Co is 1.26 times less risky than MedPacto. It trades about -0.11 of its potential returns per unit of risk. MedPacto is currently generating about -0.16 per unit of risk. If you would invest 2,085,000 in HMM Co on January 15, 2025 and sell it today you would lose (163,000) from holding HMM Co or give up 7.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMM Co vs. MedPacto
Performance |
| Timeline |
| HMM Co |
| MedPacto |
HMM and MedPacto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMM and MedPacto
The main advantage of trading using opposite HMM and MedPacto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMM position performs unexpectedly, MedPacto 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 MedPacto will offset losses from the drop in MedPacto's long position.| HMM vs. PJ Electronics Co | HMM vs. Samyoung Electronics Co | HMM vs. Jahwa Electronics Co | HMM vs. Playgram Co |
| MedPacto vs. ALTEOGEN | MedPacto vs. Busan Industrial Co | MedPacto vs. Busan Ind | MedPacto vs. Mirae Asset Daewoo |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |