Correlation Between MeVis Medical and AB SKF
Can any of the company-specific risk be diversified away by investing in both MeVis Medical and AB SKF 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 AB SKF 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 AB SKF, you can compare the effects of market volatilities on MeVis Medical and AB SKF 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 AB SKF. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and AB SKF.
Diversification Opportunities for MeVis Medical and AB SKF
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MeVis and SKFB is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and AB SKF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB SKF 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 AB SKF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB SKF has no effect on the direction of MeVis Medical i.e., MeVis Medical and AB SKF go up and down completely randomly.
Pair Corralation between MeVis Medical and AB SKF
Assuming the 90 days trading horizon MeVis Medical Solutions is expected to generate 0.51 times more return on investment than AB SKF. However, MeVis Medical Solutions is 1.95 times less risky than AB SKF. It trades about -0.05 of its potential returns per unit of risk. AB SKF is currently generating about -0.03 per unit of risk. If you would invest 2,580 in MeVis Medical Solutions on September 2, 2024 and sell it today you would lose (180.00) from holding MeVis Medical Solutions or give up 6.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MeVis Medical Solutions vs. AB SKF
Performance |
| Timeline |
| MeVis Medical Solutions |
| AB SKF |
MeVis Medical and AB SKF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeVis Medical and AB SKF
The main advantage of trading using opposite MeVis Medical and AB SKF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical position performs unexpectedly, AB SKF 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 AB SKF will offset losses from the drop in AB SKF's long position.| MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc |
| AB SKF vs. Siamgas And Petrochemicals | AB SKF vs. AIR PRODCHEMICALS | AB SKF vs. CHEMICAL INDUSTRIES | AB SKF vs. SYSTEMAIR AB |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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