Correlation Between MeVis Medical and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both MeVis Medical and Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement SA, you can compare the effects of market volatilities on MeVis Medical and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and Veolia Environnement.
Diversification Opportunities for MeVis Medical and Veolia Environnement
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MeVis and Veolia is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and Veolia Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of MeVis Medical i.e., MeVis Medical and Veolia Environnement go up and down completely randomly.
Pair Corralation between MeVis Medical and Veolia Environnement
Assuming the 90 days trading horizon MeVis Medical Solutions is expected to under-perform the Veolia Environnement. But the stock apears to be less risky and, when comparing its historical volatility, MeVis Medical Solutions is 1.07 times less risky than Veolia Environnement. The stock trades about -0.04 of its potential returns per unit of risk. The Veolia Environnement SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,773 in Veolia Environnement SA on September 14, 2024 and sell it today you would earn a total of 12.00 from holding Veolia Environnement SA or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MeVis Medical Solutions vs. Veolia Environnement SA
Performance |
| Timeline |
| MeVis Medical Solutions |
| Veolia Environnement |
MeVis Medical and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeVis Medical and Veolia Environnement
The main advantage of trading using opposite MeVis Medical and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc |
| Veolia Environnement vs. Guidewire Software | Veolia Environnement vs. ASURE SOFTWARE | Veolia Environnement vs. VITEC SOFTWARE GROUP | Veolia Environnement vs. MCEWEN MINING 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 CEOs Directory module to screen CEOs from public companies around the world.
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