Correlation Between MeVis Medical and OBSERVE MEDICAL
Can any of the company-specific risk be diversified away by investing in both MeVis Medical and OBSERVE MEDICAL 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 OBSERVE MEDICAL 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 OBSERVE MEDICAL ASA, you can compare the effects of market volatilities on MeVis Medical and OBSERVE MEDICAL 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 OBSERVE MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and OBSERVE MEDICAL.
Diversification Opportunities for MeVis Medical and OBSERVE MEDICAL
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between MeVis and OBSERVE is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and OBSERVE MEDICAL ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OBSERVE MEDICAL ASA 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 OBSERVE MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OBSERVE MEDICAL ASA has no effect on the direction of MeVis Medical i.e., MeVis Medical and OBSERVE MEDICAL go up and down completely randomly.
Pair Corralation between MeVis Medical and OBSERVE MEDICAL
Assuming the 90 days trading horizon MeVis Medical is expected to generate 676.5 times less return on investment than OBSERVE MEDICAL. But when comparing it to its historical volatility, MeVis Medical Solutions is 35.42 times less risky than OBSERVE MEDICAL. It trades about 0.0 of its potential returns per unit of risk. OBSERVE MEDICAL ASA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 41.00 in OBSERVE MEDICAL ASA on October 29, 2024 and sell it today you would lose (5.00) from holding OBSERVE MEDICAL ASA or give up 12.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
MeVis Medical Solutions vs. OBSERVE MEDICAL ASA
Performance |
| Timeline |
| MeVis Medical Solutions |
| OBSERVE MEDICAL ASA |
MeVis Medical and OBSERVE MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeVis Medical and OBSERVE MEDICAL
The main advantage of trading using opposite MeVis Medical and OBSERVE MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical position performs unexpectedly, OBSERVE MEDICAL 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 OBSERVE MEDICAL will offset losses from the drop in OBSERVE MEDICAL's long position.| MeVis Medical vs. Corporate Office Properties | MeVis Medical vs. Coor Service Management | MeVis Medical vs. Jupiter Fund Management | MeVis Medical vs. LANDSEA GREEN MANAGEMENT |
| OBSERVE MEDICAL vs. Abbott Laboratories | OBSERVE MEDICAL vs. Abbott Laboratories | OBSERVE MEDICAL vs. Medtronic PLC | OBSERVE MEDICAL vs. Stryker |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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