Correlation Between MEDICOX and Mobase Electronics
Can any of the company-specific risk be diversified away by investing in both MEDICOX and Mobase Electronics 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 MEDICOX and Mobase Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICOX Co and Mobase Electronics CoLtd, you can compare the effects of market volatilities on MEDICOX and Mobase Electronics 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 MEDICOX with a short position of Mobase Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICOX and Mobase Electronics.
Diversification Opportunities for MEDICOX and Mobase Electronics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MEDICOX and Mobase is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding MEDICOX Co and Mobase Electronics CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobase Electronics CoLtd and MEDICOX 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 MEDICOX Co are associated (or correlated) with Mobase Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobase Electronics CoLtd has no effect on the direction of MEDICOX i.e., MEDICOX and Mobase Electronics go up and down completely randomly.
Pair Corralation between MEDICOX and Mobase Electronics
Assuming the 90 days trading horizon MEDICOX Co is expected to under-perform the Mobase Electronics. In addition to that, MEDICOX is 3.56 times more volatile than Mobase Electronics CoLtd. It trades about -0.03 of its total potential returns per unit of risk. Mobase Electronics CoLtd is currently generating about -0.07 per unit of volatility. If you would invest 191,800 in Mobase Electronics CoLtd on September 1, 2024 and sell it today you would lose (34,400) from holding Mobase Electronics CoLtd or give up 17.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
MEDICOX Co vs. Mobase Electronics CoLtd
Performance |
| Timeline |
| MEDICOX |
| Mobase Electronics CoLtd |
MEDICOX and Mobase Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICOX and Mobase Electronics
The main advantage of trading using opposite MEDICOX and Mobase Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICOX position performs unexpectedly, Mobase Electronics 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 Mobase Electronics will offset losses from the drop in Mobase Electronics' long position.| MEDICOX vs. Daejung Chemicals Metals | MEDICOX vs. Lotte Energy Materials | MEDICOX vs. RF Materials Co | MEDICOX vs. MetaLabs Co |
| Mobase Electronics vs. LG Display | Mobase Electronics vs. Hyundai Motor Co | Mobase Electronics vs. Hyundai Motor Co | Mobase Electronics vs. Adaptive Plasma Technology |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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