Correlation Between Green Cross and Medy Tox
Can any of the company-specific risk be diversified away by investing in both Green Cross 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 Green Cross and Medy Tox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cross Medical and Medy Tox, you can compare the effects of market volatilities on Green Cross 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 Green Cross with a short position of Medy Tox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cross and Medy Tox.
Diversification Opportunities for Green Cross and Medy Tox
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Green and Medy is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Green Cross Medical and Medy Tox in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medy Tox and Green Cross 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 Green Cross Medical 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 Green Cross i.e., Green Cross and Medy Tox go up and down completely randomly.
Pair Corralation between Green Cross and Medy Tox
Assuming the 90 days trading horizon Green Cross Medical is expected to generate 0.53 times more return on investment than Medy Tox. However, Green Cross Medical is 1.88 times less risky than Medy Tox. It trades about -0.16 of its potential returns per unit of risk. Medy Tox is currently generating about -0.31 per unit of risk. If you would invest 404,000 in Green Cross Medical on August 25, 2024 and sell it today you would lose (32,500) from holding Green Cross Medical or give up 8.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cross Medical vs. Medy Tox
Performance |
| Timeline |
| Green Cross Medical |
| Medy Tox |
Green Cross and Medy Tox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cross and Medy Tox
The main advantage of trading using opposite Green Cross and Medy Tox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cross 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.| Green Cross vs. Medy Tox | Green Cross vs. Genexine | Green Cross vs. Busan Industrial Co | Green Cross vs. Busan Ind |
| Medy Tox vs. Genexine | Medy Tox vs. Busan Industrial Co | Medy Tox vs. Busan Ind | Medy Tox 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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