Correlation Between Medigen Biotechnology and Orient Pharma
Can any of the company-specific risk be diversified away by investing in both Medigen Biotechnology and Orient Pharma 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 Orient Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medigen Biotechnology and Orient Pharma Co, you can compare the effects of market volatilities on Medigen Biotechnology and Orient Pharma 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 Orient Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medigen Biotechnology and Orient Pharma.
Diversification Opportunities for Medigen Biotechnology and Orient Pharma
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medigen and Orient is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Medigen Biotechnology and Orient Pharma Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Pharma 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 Orient Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Pharma has no effect on the direction of Medigen Biotechnology i.e., Medigen Biotechnology and Orient Pharma go up and down completely randomly.
Pair Corralation between Medigen Biotechnology and Orient Pharma
Assuming the 90 days trading horizon Medigen Biotechnology is expected to under-perform the Orient Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Medigen Biotechnology is 2.46 times less risky than Orient Pharma. The stock trades about -0.17 of its potential returns per unit of risk. The Orient Pharma Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,610 in Orient Pharma Co on September 13, 2024 and sell it today you would earn a total of 105.00 from holding Orient Pharma Co or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medigen Biotechnology vs. Orient Pharma Co
Performance |
| Timeline |
| Medigen Biotechnology |
| Orient Pharma |
Medigen Biotechnology and Orient Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medigen Biotechnology and Orient Pharma
The main advantage of trading using opposite Medigen Biotechnology and Orient Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medigen Biotechnology position performs unexpectedly, Orient Pharma 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 Orient Pharma will offset losses from the drop in Orient Pharma's long position.| Medigen Biotechnology vs. U Media Communications | Medigen Biotechnology vs. Grand Ocean Retail | Medigen Biotechnology vs. China Times Publishing | Medigen Biotechnology vs. Galaxy Software Services |
| Orient Pharma vs. Quintain Steel Co | Orient Pharma vs. Iron Force Industrial | Orient Pharma vs. Chung Hwa Food | Orient Pharma vs. Lian Hwa Foods |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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