Correlation Between MeVis Medical and AP Møller
Can any of the company-specific risk be diversified away by investing in both MeVis Medical and AP Møller 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 AP Møller 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 AP Mller , you can compare the effects of market volatilities on MeVis Medical and AP Møller 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 AP Møller. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and AP Møller.
Diversification Opportunities for MeVis Medical and AP Møller
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MeVis and DP4A is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Møller 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 AP Møller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Møller has no effect on the direction of MeVis Medical i.e., MeVis Medical and AP Møller go up and down completely randomly.
Pair Corralation between MeVis Medical and AP Møller
Assuming the 90 days trading horizon MeVis Medical is expected to generate 143.26 times less return on investment than AP Møller. But when comparing it to its historical volatility, MeVis Medical Solutions is 3.23 times less risky than AP Møller. It trades about 0.0 of its potential returns per unit of risk. AP Mller is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 139,500 in AP Mller on September 1, 2024 and sell it today you would earn a total of 15,700 from holding AP Mller or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
MeVis Medical Solutions vs. AP Mller
Performance |
| Timeline |
| MeVis Medical Solutions |
| AP Møller |
MeVis Medical and AP Møller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeVis Medical and AP Møller
The main advantage of trading using opposite MeVis Medical and AP Møller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical position performs unexpectedly, AP Møller 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 AP Møller will offset losses from the drop in AP Møller's long position.| MeVis Medical vs. G III Apparel Group | MeVis Medical vs. AM EAGLE OUTFITTERS | MeVis Medical vs. RYU Apparel | MeVis Medical vs. Fast Retailing Co |
| AP Møller vs. Microbot Medical | AP Møller vs. ONWARD MEDICAL BV | AP Møller vs. Clearside Biomedical | AP Møller vs. MeVis Medical Solutions |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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