Correlation Between Mediantechn and AbL Diagnostics
Can any of the company-specific risk be diversified away by investing in both Mediantechn and AbL Diagnostics 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 Mediantechn and AbL Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mediantechn and AbL Diagnostics SA, you can compare the effects of market volatilities on Mediantechn and AbL Diagnostics 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 Mediantechn with a short position of AbL Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mediantechn and AbL Diagnostics.
Diversification Opportunities for Mediantechn and AbL Diagnostics
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mediantechn and AbL is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mediantechn and AbL Diagnostics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbL Diagnostics SA and Mediantechn 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 Mediantechn are associated (or correlated) with AbL Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbL Diagnostics SA has no effect on the direction of Mediantechn i.e., Mediantechn and AbL Diagnostics go up and down completely randomly.
Pair Corralation between Mediantechn and AbL Diagnostics
Assuming the 90 days trading horizon Mediantechn is expected to generate 1.26 times more return on investment than AbL Diagnostics. However, Mediantechn is 1.26 times more volatile than AbL Diagnostics SA. It trades about -0.01 of its potential returns per unit of risk. AbL Diagnostics SA is currently generating about -0.05 per unit of risk. If you would invest 805.00 in Mediantechn on August 27, 2024 and sell it today you would lose (464.00) from holding Mediantechn or give up 57.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.46% |
| Values | Daily Returns |
Mediantechn vs. AbL Diagnostics SA
Performance |
| Timeline |
| Mediantechn |
| AbL Diagnostics SA |
Mediantechn and AbL Diagnostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mediantechn and AbL Diagnostics
The main advantage of trading using opposite Mediantechn and AbL Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mediantechn position performs unexpectedly, AbL Diagnostics 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 AbL Diagnostics will offset losses from the drop in AbL Diagnostics' long position.| Mediantechn vs. Kalray SA | Mediantechn vs. Biosynex | Mediantechn vs. Eurobio Scientific SA | Mediantechn vs. OSE Pharma SA |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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