Correlation Between Medigen Biotechnology and TaiMed Biologics
Can any of the company-specific risk be diversified away by investing in both Medigen Biotechnology and TaiMed Biologics 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 Medigen Biotechnology and TaiMed Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medigen Biotechnology and TaiMed Biologics, you can compare the effects of market volatilities on Medigen Biotechnology and TaiMed Biologics 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 Medigen Biotechnology with a short position of TaiMed Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medigen Biotechnology and TaiMed Biologics.
Diversification Opportunities for Medigen Biotechnology and TaiMed Biologics
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Medigen and TaiMed is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Medigen Biotechnology and TaiMed Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TaiMed Biologics and Medigen Biotechnology 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 Medigen Biotechnology are associated (or correlated) with TaiMed Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TaiMed Biologics has no effect on the direction of Medigen Biotechnology i.e., Medigen Biotechnology and TaiMed Biologics go up and down completely randomly.
Pair Corralation between Medigen Biotechnology and TaiMed Biologics
Assuming the 90 days trading horizon Medigen Biotechnology is expected to generate 4.75 times less return on investment than TaiMed Biologics. But when comparing it to its historical volatility, Medigen Biotechnology is 1.02 times less risky than TaiMed Biologics. It trades about 0.08 of its potential returns per unit of risk. TaiMed Biologics is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 8,580 in TaiMed Biologics on November 27, 2024 and sell it today you would earn a total of 1,350 from holding TaiMed Biologics or generate 15.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medigen Biotechnology vs. TaiMed Biologics
Performance |
| Timeline |
| Medigen Biotechnology |
| TaiMed Biologics |
Medigen Biotechnology and TaiMed Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medigen Biotechnology and TaiMed Biologics
The main advantage of trading using opposite Medigen Biotechnology and TaiMed Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medigen Biotechnology position performs unexpectedly, TaiMed Biologics 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 TaiMed Biologics will offset losses from the drop in TaiMed Biologics' long position.| Medigen Biotechnology vs. Sinphar Pharmaceutical Co | Medigen Biotechnology vs. Abnova Taiwan Corp | Medigen Biotechnology vs. YungShin Global Holding | Medigen Biotechnology vs. Phytohealth Corp |
| TaiMed Biologics vs. OBI Pharma | TaiMed Biologics vs. PharmaEngine | TaiMed Biologics vs. Medigen Biotechnology | TaiMed Biologics vs. TTY Biopharm Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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