Correlation Between Integrated Micro and Medco Holdings
Can any of the company-specific risk be diversified away by investing in both Integrated Micro and Medco Holdings 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 Integrated Micro and Medco Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Micro Electronics and Medco Holdings, you can compare the effects of market volatilities on Integrated Micro and Medco Holdings 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 Integrated Micro with a short position of Medco Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Micro and Medco Holdings.
Diversification Opportunities for Integrated Micro and Medco Holdings
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Integrated and Medco is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Micro Electronics and Medco Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medco Holdings and Integrated Micro 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 Integrated Micro Electronics are associated (or correlated) with Medco Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medco Holdings has no effect on the direction of Integrated Micro i.e., Integrated Micro and Medco Holdings go up and down completely randomly.
Pair Corralation between Integrated Micro and Medco Holdings
Assuming the 90 days trading horizon Integrated Micro Electronics is expected to under-perform the Medco Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Integrated Micro Electronics is 2.11 times less risky than Medco Holdings. The stock trades about -0.06 of its potential returns per unit of risk. The Medco Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Medco Holdings on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Medco Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
Integrated Micro Electronics vs. Medco Holdings
Performance |
| Timeline |
| Integrated Micro Ele |
| Medco Holdings |
Integrated Micro and Medco Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Micro and Medco Holdings
The main advantage of trading using opposite Integrated Micro and Medco Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Micro position performs unexpectedly, Medco Holdings 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 Medco Holdings will offset losses from the drop in Medco Holdings' long position.| Integrated Micro vs. Semirara Mining Corp | Integrated Micro vs. Jollibee Foods Corp | Integrated Micro vs. Alliance Select Foods | Integrated Micro vs. Metro Retail Stores |
| Medco Holdings vs. VistaREIT | Medco Holdings vs. Bright Kindle Resources | Medco Holdings vs. Allhome Corp | Medco Holdings vs. Jollibee Foods Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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