Correlation Between MeVis Medical and Carsales
Can any of the company-specific risk be diversified away by investing in both MeVis Medical and Carsales 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 Carsales 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 Carsales, you can compare the effects of market volatilities on MeVis Medical and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and Carsales.
Diversification Opportunities for MeVis Medical and Carsales
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MeVis and Carsales is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and Carsales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carsales 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carsales has no effect on the direction of MeVis Medical i.e., MeVis Medical and Carsales go up and down completely randomly.
Pair Corralation between MeVis Medical and Carsales
Assuming the 90 days trading horizon MeVis Medical Solutions is expected to under-perform the Carsales. But the stock apears to be less risky and, when comparing its historical volatility, MeVis Medical Solutions is 1.54 times less risky than Carsales. The stock trades about 0.0 of its potential returns per unit of risk. The Carsales is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,858 in Carsales on November 3, 2024 and sell it today you would earn a total of 562.00 from holding Carsales or generate 30.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MeVis Medical Solutions vs. Carsales
Performance |
| Timeline |
| MeVis Medical Solutions |
| Carsales |
MeVis Medical and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeVis Medical and Carsales
The main advantage of trading using opposite MeVis Medical and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| MeVis Medical vs. SOLSTAD OFFSHORE NK | MeVis Medical vs. Solstad Offshore ASA | MeVis Medical vs. PNC Financial Services | MeVis Medical vs. British American Tobacco |
| Carsales vs. JIAHUA STORES | Carsales vs. SANOK RUBBER ZY | Carsales vs. THRACE PLASTICS | Carsales vs. H2O Retailing |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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