Correlation Between Apple and MeVis Medical
Can any of the company-specific risk be diversified away by investing in both Apple and MeVis 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 Apple and MeVis Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and MeVis Medical Solutions, you can compare the effects of market volatilities on Apple and MeVis 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 Apple with a short position of MeVis Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and MeVis Medical.
Diversification Opportunities for Apple and MeVis Medical
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and MeVis is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and MeVis Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeVis Medical Solutions and Apple 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 Apple Inc are associated (or correlated) with MeVis Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeVis Medical Solutions has no effect on the direction of Apple i.e., Apple and MeVis Medical go up and down completely randomly.
Pair Corralation between Apple and MeVis Medical
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the MeVis Medical. In addition to that, Apple is 3.67 times more volatile than MeVis Medical Solutions. It trades about -0.08 of its total potential returns per unit of risk. MeVis Medical Solutions is currently generating about 0.02 per unit of volatility. If you would invest 2,486 in MeVis Medical Solutions on January 18, 2025 and sell it today you would earn a total of 14.00 from holding MeVis Medical Solutions or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. MeVis Medical Solutions
Performance |
| Timeline |
| Apple Inc |
| MeVis Medical Solutions |
Apple and MeVis Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and MeVis Medical
The main advantage of trading using opposite Apple and MeVis Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, MeVis 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 MeVis Medical will offset losses from the drop in MeVis Medical's long position.The idea behind Apple Inc and MeVis Medical Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MeVis Medical vs. Perdoceo Education | MeVis Medical vs. SOEDER SPORTFISKE AB | MeVis Medical vs. CHINA EDUCATION GROUP | MeVis Medical vs. Ming Le Sports |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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