Correlation Between Advanced Medical and Marks
Can any of the company-specific risk be diversified away by investing in both Advanced Medical and Marks 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 Advanced Medical and Marks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and Marks and Spencer, you can compare the effects of market volatilities on Advanced Medical and Marks 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 Advanced Medical with a short position of Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Marks.
Diversification Opportunities for Advanced Medical and Marks
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advanced and Marks is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer and Advanced 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 Advanced Medical Solutions are associated (or correlated) with Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of Advanced Medical i.e., Advanced Medical and Marks go up and down completely randomly.
Pair Corralation between Advanced Medical and Marks
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to generate 1.01 times more return on investment than Marks. However, Advanced Medical is 1.01 times more volatile than Marks and Spencer. It trades about 0.08 of its potential returns per unit of risk. Marks and Spencer is currently generating about -0.2 per unit of risk. If you would invest 236.00 in Advanced Medical Solutions on November 4, 2024 and sell it today you would earn a total of 10.00 from holding Advanced Medical Solutions or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Marks and Spencer
Performance |
| Timeline |
| Advanced Medical Sol |
| Marks and Spencer |
Advanced Medical and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Marks
The main advantage of trading using opposite Advanced Medical and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| Advanced Medical vs. Molina Healthcare | Advanced Medical vs. US Physical Therapy | Advanced Medical vs. Scientific Games | Advanced Medical vs. QINGCI GAMES INC |
| Marks vs. ANGLO ASIAN MINING | Marks vs. REVO INSURANCE SPA | Marks vs. Japan Post Insurance | Marks vs. Aya Gold Silver |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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