Correlation Between MedMira and Northern Data
Can any of the company-specific risk be diversified away by investing in both MedMira and Northern Data 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 MedMira and Northern Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MedMira and Northern Data AG, you can compare the effects of market volatilities on MedMira and Northern Data 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 MedMira with a short position of Northern Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of MedMira and Northern Data.
Diversification Opportunities for MedMira and Northern Data
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MedMira and Northern is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding MedMira and Northern Data AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Data AG and MedMira 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 MedMira are associated (or correlated) with Northern Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Data AG has no effect on the direction of MedMira i.e., MedMira and Northern Data go up and down completely randomly.
Pair Corralation between MedMira and Northern Data
Assuming the 90 days horizon MedMira is expected to generate 6.37 times less return on investment than Northern Data. In addition to that, MedMira is 2.55 times more volatile than Northern Data AG. It trades about 0.02 of its total potential returns per unit of risk. Northern Data AG is currently generating about 0.37 per unit of volatility. If you would invest 2,855 in Northern Data AG on August 30, 2024 and sell it today you would earn a total of 1,030 from holding Northern Data AG or generate 36.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MedMira vs. Northern Data AG
Performance |
| Timeline |
| MedMira |
| Northern Data AG |
MedMira and Northern Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MedMira and Northern Data
The main advantage of trading using opposite MedMira and Northern Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MedMira position performs unexpectedly, Northern Data 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 Northern Data will offset losses from the drop in Northern Data's long position.| MedMira vs. Mercedes Benz Group AG | MedMira vs. Superior Plus Corp | MedMira vs. NMI Holdings | MedMira vs. SIVERS SEMICONDUCTORS AB |
| Northern Data vs. AGRICULTBK HADR25 YC | Northern Data vs. HF SINCLAIR P | Northern Data vs. Altair Engineering | Northern Data vs. Hanison Construction Holdings |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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