Correlation Between MEDICAL FACILITIES and ONWARD MEDICAL
Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES and ONWARD 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 MEDICAL FACILITIES and ONWARD MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICAL FACILITIES NEW and ONWARD MEDICAL BV, you can compare the effects of market volatilities on MEDICAL FACILITIES and ONWARD 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 MEDICAL FACILITIES with a short position of ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and ONWARD MEDICAL.
Diversification Opportunities for MEDICAL FACILITIES and ONWARD MEDICAL
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between MEDICAL and ONWARD is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW are associated (or correlated) with ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of MEDICAL FACILITIES i.e., MEDICAL FACILITIES and ONWARD MEDICAL go up and down completely randomly.
Pair Corralation between MEDICAL FACILITIES and ONWARD MEDICAL
Assuming the 90 days horizon MEDICAL FACILITIES NEW is expected to generate 0.78 times more return on investment than ONWARD MEDICAL. However, MEDICAL FACILITIES NEW is 1.29 times less risky than ONWARD MEDICAL. It trades about 0.23 of its potential returns per unit of risk. ONWARD MEDICAL BV is currently generating about -0.03 per unit of risk. If you would invest 960.00 in MEDICAL FACILITIES NEW on August 29, 2024 and sell it today you would earn a total of 120.00 from holding MEDICAL FACILITIES NEW or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDICAL FACILITIES NEW vs. ONWARD MEDICAL BV
Performance |
| Timeline |
| MEDICAL FACILITIES NEW |
| ONWARD MEDICAL BV |
MEDICAL FACILITIES and ONWARD MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICAL FACILITIES and ONWARD MEDICAL
The main advantage of trading using opposite MEDICAL FACILITIES and ONWARD MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICAL FACILITIES position performs unexpectedly, ONWARD 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 ONWARD MEDICAL will offset losses from the drop in ONWARD MEDICAL's long position.| MEDICAL FACILITIES vs. Ramsay Health Care | MEDICAL FACILITIES vs. Superior Plus Corp | MEDICAL FACILITIES vs. NMI Holdings | MEDICAL FACILITIES vs. Origin Agritech |
| ONWARD MEDICAL vs. Superior Plus Corp | ONWARD MEDICAL vs. NMI Holdings | ONWARD MEDICAL vs. Origin Agritech | ONWARD MEDICAL vs. SIVERS SEMICONDUCTORS AB |
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 Stocks Directory module to find actively traded stocks across global markets.
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