Correlation Between Export Development and Medical Packaging
Can any of the company-specific risk be diversified away by investing in both Export Development and Medical Packaging 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 Export Development and Medical Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Export Development Bank and Medical Packaging, you can compare the effects of market volatilities on Export Development and Medical Packaging 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 Export Development with a short position of Medical Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Export Development and Medical Packaging.
Diversification Opportunities for Export Development and Medical Packaging
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Export and Medical is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Export Development Bank and Medical Packaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Packaging and Export Development 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 Export Development Bank are associated (or correlated) with Medical Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Packaging has no effect on the direction of Export Development i.e., Export Development and Medical Packaging go up and down completely randomly.
Pair Corralation between Export Development and Medical Packaging
Assuming the 90 days trading horizon Export Development Bank is expected to under-perform the Medical Packaging. But the stock apears to be less risky and, when comparing its historical volatility, Export Development Bank is 1.47 times less risky than Medical Packaging. The stock trades about -0.09 of its potential returns per unit of risk. The Medical Packaging is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 129.00 in Medical Packaging on September 24, 2024 and sell it today you would earn a total of 5.00 from holding Medical Packaging or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Export Development Bank vs. Medical Packaging
Performance |
| Timeline |
| Export Development Bank |
| Medical Packaging |
Export Development and Medical Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Export Development and Medical Packaging
The main advantage of trading using opposite Export Development and Medical Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Export Development position performs unexpectedly, Medical Packaging 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 Packaging will offset losses from the drop in Medical Packaging's long position.| Export Development vs. Memphis Pharmaceuticals | Export Development vs. Paint Chemicals Industries | Export Development vs. Egyptians For Investment | Export Development vs. Global Telecom Holding |
| Medical Packaging vs. Memphis Pharmaceuticals | Medical Packaging vs. Paint Chemicals Industries | Medical Packaging vs. Egyptians For Investment | Medical Packaging vs. Global Telecom Holding |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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