Correlation Between MeVis Medical and China Resources
Can any of the company-specific risk be diversified away by investing in both MeVis Medical and China Resources 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 China Resources 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 China Resources Beer, you can compare the effects of market volatilities on MeVis Medical and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and China Resources.
Diversification Opportunities for MeVis Medical and China Resources
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MeVis and China is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and China Resources Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Beer 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Beer has no effect on the direction of MeVis Medical i.e., MeVis Medical and China Resources go up and down completely randomly.
Pair Corralation between MeVis Medical and China Resources
Assuming the 90 days trading horizon MeVis Medical is expected to generate 3.18 times less return on investment than China Resources. But when comparing it to its historical volatility, MeVis Medical Solutions is 3.29 times less risky than China Resources. It trades about 0.02 of its potential returns per unit of risk. China Resources Beer is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 271.00 in China Resources Beer on October 17, 2024 and sell it today you would earn a total of 13.00 from holding China Resources Beer or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MeVis Medical Solutions vs. China Resources Beer
Performance |
| Timeline |
| MeVis Medical Solutions |
| China Resources Beer |
MeVis Medical and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeVis Medical and China Resources
The main advantage of trading using opposite MeVis Medical and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc |
| China Resources vs. Renesas Electronics | China Resources vs. National Beverage Corp | China Resources vs. STMicroelectronics NV | China Resources vs. Nucletron Electronic Aktiengesellschaft |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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