Correlation Between Medicure and Incannex Healthcare
Can any of the company-specific risk be diversified away by investing in both Medicure and Incannex Healthcare 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 Incannex Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medicure and Incannex Healthcare Ltd, you can compare the effects of market volatilities on Medicure and Incannex Healthcare 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 Incannex Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medicure and Incannex Healthcare.
Diversification Opportunities for Medicure and Incannex Healthcare
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medicure and Incannex is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Medicure and Incannex Healthcare Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incannex Healthcare 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 Incannex Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incannex Healthcare has no effect on the direction of Medicure i.e., Medicure and Incannex Healthcare go up and down completely randomly.
Pair Corralation between Medicure and Incannex Healthcare
Assuming the 90 days horizon Medicure is expected to generate 0.62 times more return on investment than Incannex Healthcare. However, Medicure is 1.6 times less risky than Incannex Healthcare. It trades about -0.06 of its potential returns per unit of risk. Incannex Healthcare Ltd is currently generating about -0.05 per unit of risk. If you would invest 63.00 in Medicure on August 26, 2024 and sell it today you would lose (5.00) from holding Medicure or give up 7.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medicure vs. Incannex Healthcare Ltd
Performance |
| Timeline |
| Medicure |
| Incannex Healthcare |
Medicure and Incannex Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medicure and Incannex Healthcare
The main advantage of trading using opposite Medicure and Incannex Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medicure position performs unexpectedly, Incannex Healthcare 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 Incannex Healthcare will offset losses from the drop in Incannex Healthcare's long position.| Medicure vs. Rezolute | Medicure vs. Tempest Therapeutics | Medicure vs. Forte Biosciences | Medicure vs. Dyadic International |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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