Correlation Between MeVis Medical and WIMFARM SA

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Can any of the company-specific risk be diversified away by investing in both MeVis Medical and WIMFARM SA 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 MeVis Medical and WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MeVis Medical Solutions and WIMFARM SA EO, you can compare the effects of market volatilities on MeVis Medical and WIMFARM SA 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 MeVis Medical with a short position of WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and WIMFARM SA.

Diversification Opportunities for MeVis Medical and WIMFARM SA

MeVisWIMFARMDiversified AwayMeVisWIMFARMDiversified Away100%
0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between MeVis and WIMFARM is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO and MeVis Medical 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 MeVis Medical Solutions are associated (or correlated) with WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of MeVis Medical i.e., MeVis Medical and WIMFARM SA go up and down completely randomly.

Pair Corralation between MeVis Medical and WIMFARM SA

Assuming the 90 days trading horizon MeVis Medical is expected to generate 2.12 times less return on investment than WIMFARM SA. But when comparing it to its historical volatility, MeVis Medical Solutions is 5.96 times less risky than WIMFARM SA. It trades about 0.05 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  376.00  in WIMFARM SA EO on November 24, 2024 and sell it today you would lose (2.00) from holding WIMFARM SA EO or give up 0.53% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

MeVis Medical Solutions  vs.  WIMFARM SA EO

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0510152025
JavaScript chart by amCharts 3.21.15M3V 6WW
       Timeline  
MeVis Medical Solutions 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in MeVis Medical Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MeVis Medical is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2424.52525.5
WIMFARM SA EO 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in WIMFARM SA EO are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, WIMFARM SA reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3.23.33.43.53.63.73.83.94

MeVis Medical and WIMFARM SA Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.04-2.28-1.52-0.750.01330.81.592.393.18 0.10.20.30.4
JavaScript chart by amCharts 3.21.15M3V 6WW
       Returns  

Pair Trading with MeVis Medical and WIMFARM SA

The main advantage of trading using opposite MeVis Medical and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.
The idea behind MeVis Medical Solutions and WIMFARM SA EO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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