Correlation Between Medicure and Covalon Technologies
Can any of the company-specific risk be diversified away by investing in both Medicure and Covalon Technologies 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 Medicure and Covalon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medicure and Covalon Technologies, you can compare the effects of market volatilities on Medicure and Covalon Technologies 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 Medicure with a short position of Covalon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medicure and Covalon Technologies.
Diversification Opportunities for Medicure and Covalon Technologies
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medicure and Covalon is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Medicure and Covalon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covalon Technologies and Medicure 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 Medicure are associated (or correlated) with Covalon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covalon Technologies has no effect on the direction of Medicure i.e., Medicure and Covalon Technologies go up and down completely randomly.
Pair Corralation between Medicure and Covalon Technologies
Assuming the 90 days horizon Medicure is expected to generate 1.01 times less return on investment than Covalon Technologies. In addition to that, Medicure is 1.39 times more volatile than Covalon Technologies. It trades about 0.04 of its total potential returns per unit of risk. Covalon Technologies is currently generating about 0.05 per unit of volatility. If you would invest 242.00 in Covalon Technologies on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Covalon Technologies or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medicure vs. Covalon Technologies
Performance |
| Timeline |
| Medicure |
| Covalon Technologies |
Medicure and Covalon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medicure and Covalon Technologies
The main advantage of trading using opposite Medicure and Covalon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medicure position performs unexpectedly, Covalon Technologies 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 Covalon Technologies will offset losses from the drop in Covalon Technologies' long position.| Medicure vs. Grey Cloak Tech | Medicure vs. CuraScientific Corp | Medicure vs. Love Hemp Group | Medicure vs. Greater Cannabis |
| Covalon Technologies vs. Grey Cloak Tech | Covalon Technologies vs. CuraScientific Corp | Covalon Technologies vs. Love Hemp Group | Covalon Technologies vs. Greater Cannabis |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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