Correlation Between Indutrade and MeVis Medical
Can any of the company-specific risk be diversified away by investing in both Indutrade and MeVis Medical 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 Indutrade and MeVis Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indutrade AB and MeVis Medical Solutions, you can compare the effects of market volatilities on Indutrade and MeVis Medical 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 Indutrade with a short position of MeVis Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and MeVis Medical.
Diversification Opportunities for Indutrade and MeVis Medical
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Indutrade and MeVis is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and MeVis Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeVis Medical Solutions and Indutrade 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 Indutrade AB are associated (or correlated) with MeVis Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeVis Medical Solutions has no effect on the direction of Indutrade i.e., Indutrade and MeVis Medical go up and down completely randomly.
Pair Corralation between Indutrade and MeVis Medical
Assuming the 90 days horizon Indutrade AB is expected to generate 2.14 times more return on investment than MeVis Medical. However, Indutrade is 2.14 times more volatile than MeVis Medical Solutions. It trades about 0.27 of its potential returns per unit of risk. MeVis Medical Solutions is currently generating about 0.25 per unit of risk. If you would invest 2,380 in Indutrade AB on October 24, 2024 and sell it today you would earn a total of 186.00 from holding Indutrade AB or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indutrade AB vs. MeVis Medical Solutions
Performance |
| Timeline |
| Indutrade AB |
| MeVis Medical Solutions |
Indutrade and MeVis Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and MeVis Medical
The main advantage of trading using opposite Indutrade and MeVis Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, MeVis Medical 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 MeVis Medical will offset losses from the drop in MeVis Medical's long position.| Indutrade vs. GungHo Online Entertainment | Indutrade vs. Madison Square Garden | Indutrade vs. COLUMBIA SPORTSWEAR | Indutrade vs. Nexstar Media Group |
| MeVis Medical vs. GRIFFIN MINING LTD | MeVis Medical vs. SPORT LISBOA E | MeVis Medical vs. USWE SPORTS AB | MeVis Medical vs. Harmony Gold Mining |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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