Correlation Between MeVis Medical and Hitachi Construction
Can any of the company-specific risk be diversified away by investing in both MeVis Medical and Hitachi Construction 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 Hitachi Construction 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 Hitachi Construction Machinery, you can compare the effects of market volatilities on MeVis Medical and Hitachi Construction 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 Hitachi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and Hitachi Construction.
Diversification Opportunities for MeVis Medical and Hitachi Construction
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between MeVis and Hitachi is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and Hitachi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Construction 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 Hitachi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Construction has no effect on the direction of MeVis Medical i.e., MeVis Medical and Hitachi Construction go up and down completely randomly.
Pair Corralation between MeVis Medical and Hitachi Construction
Assuming the 90 days trading horizon MeVis Medical Solutions is expected to generate 0.87 times more return on investment than Hitachi Construction. However, MeVis Medical Solutions is 1.16 times less risky than Hitachi Construction. It trades about 0.18 of its potential returns per unit of risk. Hitachi Construction Machinery is currently generating about -0.18 per unit of risk. If you would invest 2,400 in MeVis Medical Solutions on October 11, 2024 and sell it today you would earn a total of 100.00 from holding MeVis Medical Solutions or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
MeVis Medical Solutions vs. Hitachi Construction Machinery
Performance |
| Timeline |
| MeVis Medical Solutions |
| Hitachi Construction |
MeVis Medical and Hitachi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeVis Medical and Hitachi Construction
The main advantage of trading using opposite MeVis Medical and Hitachi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical position performs unexpectedly, Hitachi Construction 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 Hitachi Construction will offset losses from the drop in Hitachi Construction's long position.| MeVis Medical vs. China Datang | MeVis Medical vs. DATATEC LTD 2 | MeVis Medical vs. Tsingtao Brewery | MeVis Medical vs. Cass Information Systems |
| Hitachi Construction vs. MOVIE GAMES SA | Hitachi Construction vs. 24SEVENOFFICE GROUP AB | Hitachi Construction vs. Media and Games | Hitachi Construction vs. HOCHSCHILD MINING |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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