Correlation Between First International and MediPress Health
Can any of the company-specific risk be diversified away by investing in both First International and MediPress Health 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 First International and MediPress Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First International Bank and MediPress Health Limited Partnership, you can compare the effects of market volatilities on First International and MediPress Health 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 First International with a short position of MediPress Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of First International and MediPress Health.
Diversification Opportunities for First International and MediPress Health
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and MediPress is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding First International Bank and MediPress Health Limited Partn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediPress Health Lim and First International 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 First International Bank are associated (or correlated) with MediPress Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediPress Health Lim has no effect on the direction of First International i.e., First International and MediPress Health go up and down completely randomly.
Pair Corralation between First International and MediPress Health
Assuming the 90 days trading horizon First International is expected to generate 5.14 times less return on investment than MediPress Health. But when comparing it to its historical volatility, First International Bank is 2.15 times less risky than MediPress Health. It trades about 0.15 of its potential returns per unit of risk. MediPress Health Limited Partnership is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 6,660 in MediPress Health Limited Partnership on September 1, 2024 and sell it today you would earn a total of 1,010 from holding MediPress Health Limited Partnership or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
First International Bank vs. MediPress Health Limited Partn
Performance |
| Timeline |
| First International Bank |
| MediPress Health Lim |
First International and MediPress Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First International and MediPress Health
The main advantage of trading using opposite First International and MediPress Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First International position performs unexpectedly, MediPress Health 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 MediPress Health will offset losses from the drop in MediPress Health's long position.| First International vs. Israel Discount Bank | First International vs. Mizrahi Tefahot | First International vs. Bank Leumi Le Israel | First International vs. Bank Hapoalim |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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