Correlation Between Newretail and Dynamic Medical
Can any of the company-specific risk be diversified away by investing in both Newretail and Dynamic Medical 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 Newretail and Dynamic Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newretail Co and Dynamic Medical Technologies, you can compare the effects of market volatilities on Newretail and Dynamic Medical 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 Newretail with a short position of Dynamic Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newretail and Dynamic Medical.
Diversification Opportunities for Newretail and Dynamic Medical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Newretail and Dynamic is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Newretail Co and Dynamic Medical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Medical Tech and Newretail 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 Newretail Co are associated (or correlated) with Dynamic Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Medical Tech has no effect on the direction of Newretail i.e., Newretail and Dynamic Medical go up and down completely randomly.
Pair Corralation between Newretail and Dynamic Medical
Assuming the 90 days trading horizon Newretail Co is expected to generate 2.43 times more return on investment than Dynamic Medical. However, Newretail is 2.43 times more volatile than Dynamic Medical Technologies. It trades about 0.15 of its potential returns per unit of risk. Dynamic Medical Technologies is currently generating about -0.16 per unit of risk. If you would invest 2,450 in Newretail Co on October 12, 2024 and sell it today you would earn a total of 150.00 from holding Newretail Co or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newretail Co vs. Dynamic Medical Technologies
Performance |
| Timeline |
| Newretail |
| Dynamic Medical Tech |
Newretail and Dynamic Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newretail and Dynamic Medical
The main advantage of trading using opposite Newretail and Dynamic Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newretail position performs unexpectedly, Dynamic Medical 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 Dynamic Medical will offset losses from the drop in Dynamic Medical's long position.| Newretail vs. U Tech Media Corp | Newretail vs. Yuanta Financial Holdings | Newretail vs. First Insurance Co | Newretail vs. Pili International Multimedia |
| Dynamic Medical vs. Weltrend Semiconductor | Dynamic Medical vs. Sinopower Semiconductor | Dynamic Medical vs. FDC International Hotels | Dynamic Medical vs. Grand Ocean Retail |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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