Correlation Between Celltrion Pharm and Medy Tox
Can any of the company-specific risk be diversified away by investing in both Celltrion Pharm and Medy Tox 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 Celltrion Pharm and Medy Tox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celltrion Pharm and Medy Tox, you can compare the effects of market volatilities on Celltrion Pharm and Medy Tox 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 Celltrion Pharm with a short position of Medy Tox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celltrion Pharm and Medy Tox.
Diversification Opportunities for Celltrion Pharm and Medy Tox
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Celltrion and Medy is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Celltrion Pharm and Medy Tox in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medy Tox and Celltrion Pharm 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 Celltrion Pharm are associated (or correlated) with Medy Tox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medy Tox has no effect on the direction of Celltrion Pharm i.e., Celltrion Pharm and Medy Tox go up and down completely randomly.
Pair Corralation between Celltrion Pharm and Medy Tox
Assuming the 90 days trading horizon Celltrion Pharm is expected to under-perform the Medy Tox. But the stock apears to be less risky and, when comparing its historical volatility, Celltrion Pharm is 1.28 times less risky than Medy Tox. The stock trades about -0.27 of its potential returns per unit of risk. The Medy Tox is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 12,570,000 in Medy Tox on November 7, 2024 and sell it today you would lose (730,000) from holding Medy Tox or give up 5.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Celltrion Pharm vs. Medy Tox
Performance |
| Timeline |
| Celltrion Pharm |
| Medy Tox |
Celltrion Pharm and Medy Tox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celltrion Pharm and Medy Tox
The main advantage of trading using opposite Celltrion Pharm and Medy Tox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celltrion Pharm position performs unexpectedly, Medy Tox 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 Medy Tox will offset losses from the drop in Medy Tox's long position.| Celltrion Pharm vs. Samsung Electronics Co | Celltrion Pharm vs. Samsung Electronics Co | Celltrion Pharm vs. KB Financial Group | Celltrion Pharm vs. Shinhan Financial Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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