Correlation Between EMERGENT BIOSOLUT and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both EMERGENT BIOSOLUT and MEDICAL FACILITIES 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 EMERGENT BIOSOLUT and MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMERGENT BIOSOLUT and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on EMERGENT BIOSOLUT and MEDICAL FACILITIES 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 EMERGENT BIOSOLUT with a short position of MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMERGENT BIOSOLUT and MEDICAL FACILITIES.
Diversification Opportunities for EMERGENT BIOSOLUT and MEDICAL FACILITIES
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between EMERGENT and MEDICAL is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding EMERGENT BIOSOLUT and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW and EMERGENT BIOSOLUT 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 EMERGENT BIOSOLUT are associated (or correlated) with MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of EMERGENT BIOSOLUT i.e., EMERGENT BIOSOLUT and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between EMERGENT BIOSOLUT and MEDICAL FACILITIES
Assuming the 90 days trading horizon EMERGENT BIOSOLUT is expected to under-perform the MEDICAL FACILITIES. In addition to that, EMERGENT BIOSOLUT is 1.22 times more volatile than MEDICAL FACILITIES NEW. It trades about -0.52 of its total potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about 0.11 per unit of volatility. If you would invest 1,080 in MEDICAL FACILITIES NEW on November 28, 2024 and sell it today you would earn a total of 70.00 from holding MEDICAL FACILITIES NEW or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
EMERGENT BIOSOLUT vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| EMERGENT BIOSOLUT |
| MEDICAL FACILITIES NEW |
EMERGENT BIOSOLUT and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMERGENT BIOSOLUT and MEDICAL FACILITIES
The main advantage of trading using opposite EMERGENT BIOSOLUT and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMERGENT BIOSOLUT position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| EMERGENT BIOSOLUT vs. SYSTEMAIR AB | EMERGENT BIOSOLUT vs. Japan Medical Dynamic | EMERGENT BIOSOLUT vs. Diamyd Medical AB | EMERGENT BIOSOLUT vs. Altair Engineering |
| MEDICAL FACILITIES vs. Suntory Beverage Food | MEDICAL FACILITIES vs. Boston Beer Co | MEDICAL FACILITIES vs. Australian Agricultural | MEDICAL FACILITIES vs. Penta Ocean Construction Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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