Correlation Between MeVis Medical and Danaher
Can any of the company-specific risk be diversified away by investing in both MeVis Medical and Danaher 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 Danaher 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 Danaher, you can compare the effects of market volatilities on MeVis Medical and Danaher 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 Danaher. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and Danaher.
Diversification Opportunities for MeVis Medical and Danaher
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MeVis and Danaher is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and Danaher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaher 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 Danaher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaher has no effect on the direction of MeVis Medical i.e., MeVis Medical and Danaher go up and down completely randomly.
Pair Corralation between MeVis Medical and Danaher
Assuming the 90 days trading horizon MeVis Medical Solutions is expected to under-perform the Danaher. But the stock apears to be less risky and, when comparing its historical volatility, MeVis Medical Solutions is 1.21 times less risky than Danaher. The stock trades about -0.04 of its potential returns per unit of risk. The Danaher is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 22,870 in Danaher on September 3, 2024 and sell it today you would lose (145.00) from holding Danaher or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MeVis Medical Solutions vs. Danaher
Performance |
| Timeline |
| MeVis Medical Solutions |
| Danaher |
MeVis Medical and Danaher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeVis Medical and Danaher
The main advantage of trading using opposite MeVis Medical and Danaher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical position performs unexpectedly, Danaher 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 Danaher will offset losses from the drop in Danaher's long position.| MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc |
| Danaher vs. Thermo Fisher Scientific | Danaher vs. Danaher | Danaher vs. SIEMENS HEALTH ADR050 | Danaher vs. DexCom Inc |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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