Correlation Between Medeon Biodesign and Hotel Holiday
Can any of the company-specific risk be diversified away by investing in both Medeon Biodesign and Hotel Holiday 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 Medeon Biodesign and Hotel Holiday into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medeon Biodesign and Hotel Holiday Garden, you can compare the effects of market volatilities on Medeon Biodesign and Hotel Holiday 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 Medeon Biodesign with a short position of Hotel Holiday. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medeon Biodesign and Hotel Holiday.
Diversification Opportunities for Medeon Biodesign and Hotel Holiday
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Medeon and Hotel is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Medeon Biodesign and Hotel Holiday Garden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Holiday Garden and Medeon Biodesign 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 Medeon Biodesign are associated (or correlated) with Hotel Holiday. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Holiday Garden has no effect on the direction of Medeon Biodesign i.e., Medeon Biodesign and Hotel Holiday go up and down completely randomly.
Pair Corralation between Medeon Biodesign and Hotel Holiday
Assuming the 90 days trading horizon Medeon Biodesign is expected to generate 1.86 times more return on investment than Hotel Holiday. However, Medeon Biodesign is 1.86 times more volatile than Hotel Holiday Garden. It trades about 0.55 of its potential returns per unit of risk. Hotel Holiday Garden is currently generating about 0.05 per unit of risk. If you would invest 3,785 in Medeon Biodesign on November 28, 2024 and sell it today you would earn a total of 575.00 from holding Medeon Biodesign or generate 15.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medeon Biodesign vs. Hotel Holiday Garden
Performance |
| Timeline |
| Medeon Biodesign |
| Hotel Holiday Garden |
Medeon Biodesign and Hotel Holiday Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medeon Biodesign and Hotel Holiday
The main advantage of trading using opposite Medeon Biodesign and Hotel Holiday positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medeon Biodesign position performs unexpectedly, Hotel Holiday 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 Hotel Holiday will offset losses from the drop in Hotel Holiday's long position.| Medeon Biodesign vs. Gamania Digital Entertainment | Medeon Biodesign vs. Yuanta Financial Holdings | Medeon Biodesign vs. Eastern Media International | Medeon Biodesign vs. Taishin Financial Holding |
| Hotel Holiday vs. First Hotel Co | Hotel Holiday vs. Leofoo Development Co | Hotel Holiday vs. Taiwan Tea Corp | Hotel Holiday vs. China Container Terminal |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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