Correlation Between Gtn and Medical Developments
Can any of the company-specific risk be diversified away by investing in both Gtn and Medical Developments 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 Gtn and Medical Developments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gtn and Medical Developments International, you can compare the effects of market volatilities on Gtn and Medical Developments 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 Gtn with a short position of Medical Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gtn and Medical Developments.
Diversification Opportunities for Gtn and Medical Developments
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gtn and Medical is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Gtn and Medical Developments Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Developments and Gtn 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 Gtn are associated (or correlated) with Medical Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Developments has no effect on the direction of Gtn i.e., Gtn and Medical Developments go up and down completely randomly.
Pair Corralation between Gtn and Medical Developments
Assuming the 90 days trading horizon Gtn is expected to generate 0.69 times more return on investment than Medical Developments. However, Gtn is 1.45 times less risky than Medical Developments. It trades about 0.04 of its potential returns per unit of risk. Medical Developments International is currently generating about -0.01 per unit of risk. If you would invest 42.00 in Gtn on September 2, 2024 and sell it today you would earn a total of 12.00 from holding Gtn or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gtn vs. Medical Developments Internati
Performance |
| Timeline |
| Gtn |
| Medical Developments |
Gtn and Medical Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gtn and Medical Developments
The main advantage of trading using opposite Gtn and Medical Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gtn position performs unexpectedly, Medical Developments 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 Developments will offset losses from the drop in Medical Developments' long position.| Gtn vs. Capitol Health | Gtn vs. Kip McGrath Education | Gtn vs. Sonic Healthcare | Gtn vs. Australian Unity Office |
| Medical Developments vs. Steamships Trading | Medical Developments vs. Carlton Investments | Medical Developments vs. Diversified United Investment | Medical Developments vs. Collins Foods |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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