Correlation Between BHI and MEDICOX
Can any of the company-specific risk be diversified away by investing in both BHI and MEDICOX 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 BHI and MEDICOX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BHI Co and MEDICOX Co, you can compare the effects of market volatilities on BHI and MEDICOX 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 BHI with a short position of MEDICOX. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHI and MEDICOX.
Diversification Opportunities for BHI and MEDICOX
Good diversification
The 3 months correlation between BHI and MEDICOX is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding BHI Co and MEDICOX Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICOX and BHI 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 BHI Co are associated (or correlated) with MEDICOX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICOX has no effect on the direction of BHI i.e., BHI and MEDICOX go up and down completely randomly.
Pair Corralation between BHI and MEDICOX
Assuming the 90 days trading horizon BHI Co is expected to generate 0.79 times more return on investment than MEDICOX. However, BHI Co is 1.27 times less risky than MEDICOX. It trades about 0.08 of its potential returns per unit of risk. MEDICOX Co is currently generating about -0.05 per unit of risk. If you would invest 640,000 in BHI Co on November 2, 2024 and sell it today you would earn a total of 1,710,000 from holding BHI Co or generate 267.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
BHI Co vs. MEDICOX Co
Performance |
| Timeline |
| BHI Co |
| MEDICOX |
BHI and MEDICOX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHI and MEDICOX
The main advantage of trading using opposite BHI and MEDICOX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHI position performs unexpectedly, MEDICOX 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 MEDICOX will offset losses from the drop in MEDICOX's long position.| BHI vs. Korean Reinsurance Co | BHI vs. Korea Industrial Co | BHI vs. Hyunwoo Industrial Co | BHI vs. Lotte Non Life Insurance |
| MEDICOX vs. Korea Petro Chemical | MEDICOX vs. CJ Seafood Corp | MEDICOX vs. Hanil Chemical Ind | MEDICOX vs. Tae Kyung Chemical |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |