Correlation Between Media 6 and Diagnostic Medical
Can any of the company-specific risk be diversified away by investing in both Media 6 and Diagnostic 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 Media 6 and Diagnostic Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media 6 SA and Diagnostic Medical Systems, you can compare the effects of market volatilities on Media 6 and Diagnostic 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 Media 6 with a short position of Diagnostic Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media 6 and Diagnostic Medical.
Diversification Opportunities for Media 6 and Diagnostic Medical
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Media and Diagnostic is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Media 6 SA and Diagnostic Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diagnostic Medical and Media 6 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 Media 6 SA are associated (or correlated) with Diagnostic Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diagnostic Medical has no effect on the direction of Media 6 i.e., Media 6 and Diagnostic Medical go up and down completely randomly.
Pair Corralation between Media 6 and Diagnostic Medical
Assuming the 90 days trading horizon Media 6 SA is expected to generate 1.26 times more return on investment than Diagnostic Medical. However, Media 6 is 1.26 times more volatile than Diagnostic Medical Systems. It trades about 0.03 of its potential returns per unit of risk. Diagnostic Medical Systems is currently generating about -0.02 per unit of risk. If you would invest 990.00 in Media 6 SA on November 2, 2024 and sell it today you would earn a total of 250.00 from holding Media 6 SA or generate 25.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.83% |
| Values | Daily Returns |
Media 6 SA vs. Diagnostic Medical Systems
Performance |
| Timeline |
| Media 6 SA |
| Diagnostic Medical |
Media 6 and Diagnostic Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media 6 and Diagnostic Medical
The main advantage of trading using opposite Media 6 and Diagnostic Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media 6 position performs unexpectedly, Diagnostic 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 Diagnostic Medical will offset losses from the drop in Diagnostic Medical's long position.| Media 6 vs. Lacroix Group SA | Media 6 vs. Fiducial Office Solutions | Media 6 vs. ACTEOS SA | Media 6 vs. Passat Socit Anonyme |
| Diagnostic Medical vs. Jacquet Metal Service | Diagnostic Medical vs. ZCCM Investments Holdings | Diagnostic Medical vs. Reworld Media | Diagnostic Medical vs. Eutelsat Communications SA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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