Correlation Between Smart Share and MEDIFAST INC
Can any of the company-specific risk be diversified away by investing in both Smart Share and MEDIFAST INC 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 Smart Share and MEDIFAST INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smart Share Global and MEDIFAST INC, you can compare the effects of market volatilities on Smart Share and MEDIFAST INC 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 Smart Share with a short position of MEDIFAST INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart Share and MEDIFAST INC.
Diversification Opportunities for Smart Share and MEDIFAST INC
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Smart and MEDIFAST is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Smart Share Global and MEDIFAST INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIFAST INC and Smart Share 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 Smart Share Global are associated (or correlated) with MEDIFAST INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIFAST INC has no effect on the direction of Smart Share i.e., Smart Share and MEDIFAST INC go up and down completely randomly.
Pair Corralation between Smart Share and MEDIFAST INC
Allowing for the 90-day total investment horizon Smart Share Global is expected to generate 2.13 times more return on investment than MEDIFAST INC. However, Smart Share is 2.13 times more volatile than MEDIFAST INC. It trades about 0.12 of its potential returns per unit of risk. MEDIFAST INC is currently generating about 0.01 per unit of risk. If you would invest 55.00 in Smart Share Global on August 26, 2024 and sell it today you would earn a total of 14.00 from holding Smart Share Global or generate 25.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smart Share Global vs. MEDIFAST INC
Performance |
| Timeline |
| Smart Share Global |
| MEDIFAST INC |
Smart Share and MEDIFAST INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smart Share and MEDIFAST INC
The main advantage of trading using opposite Smart Share and MEDIFAST INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart Share position performs unexpectedly, MEDIFAST INC 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 MEDIFAST INC will offset losses from the drop in MEDIFAST INC's long position.| Smart Share vs. Frontdoor | Smart Share vs. Bright Horizons Family | Smart Share vs. Mister Car Wash | Smart Share vs. Carriage Services |
| MEDIFAST INC vs. Rollins | MEDIFAST INC vs. Carriage Services | MEDIFAST INC vs. Service International | MEDIFAST INC vs. Bright Horizons Family |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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