Correlation Between Dynamic Medical and Newretail
Can any of the company-specific risk be diversified away by investing in both Dynamic Medical and Newretail 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 Dynamic Medical and Newretail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynamic Medical Technologies and Newretail Co, you can compare the effects of market volatilities on Dynamic Medical and Newretail 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 Dynamic Medical with a short position of Newretail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynamic Medical and Newretail.
Diversification Opportunities for Dynamic Medical and Newretail
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dynamic and Newretail is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Medical Technologies and Newretail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newretail and Dynamic Medical 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 Dynamic Medical Technologies are associated (or correlated) with Newretail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newretail has no effect on the direction of Dynamic Medical i.e., Dynamic Medical and Newretail go up and down completely randomly.
Pair Corralation between Dynamic Medical and Newretail
Assuming the 90 days trading horizon Dynamic Medical Technologies is expected to under-perform the Newretail. But the stock apears to be less risky and, when comparing its historical volatility, Dynamic Medical Technologies is 2.43 times less risky than Newretail. The stock trades about -0.16 of its potential returns per unit of risk. The Newretail Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. 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 |
Dynamic Medical Technologies vs. Newretail Co
Performance |
| Timeline |
| Dynamic Medical Tech |
| Newretail |
Dynamic Medical and Newretail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynamic Medical and Newretail
The main advantage of trading using opposite Dynamic Medical and Newretail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynamic Medical position performs unexpectedly, Newretail 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 Newretail will offset losses from the drop in Newretail's long position.| Dynamic Medical vs. Weltrend Semiconductor | Dynamic Medical vs. Sinopower Semiconductor | Dynamic Medical vs. FDC International Hotels | Dynamic Medical vs. Grand Ocean Retail |
| Newretail vs. U Tech Media Corp | Newretail vs. Yuanta Financial Holdings | Newretail vs. First Insurance Co | Newretail vs. Pili International Multimedia |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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