Correlation Between Mednax and EDAP TMS
Can any of the company-specific risk be diversified away by investing in both Mednax and EDAP TMS 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 Mednax and EDAP TMS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mednax Inc and EDAP TMS SA, you can compare the effects of market volatilities on Mednax and EDAP TMS 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 Mednax with a short position of EDAP TMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mednax and EDAP TMS.
Diversification Opportunities for Mednax and EDAP TMS
Excellent diversification
The 3 months correlation between Mednax and EDAP is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mednax Inc and EDAP TMS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDAP TMS SA and Mednax 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 Mednax Inc are associated (or correlated) with EDAP TMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDAP TMS SA has no effect on the direction of Mednax i.e., Mednax and EDAP TMS go up and down completely randomly.
Pair Corralation between Mednax and EDAP TMS
Allowing for the 90-day total investment horizon Mednax Inc is expected to generate 0.95 times more return on investment than EDAP TMS. However, Mednax Inc is 1.05 times less risky than EDAP TMS. It trades about 0.17 of its potential returns per unit of risk. EDAP TMS SA is currently generating about -0.14 per unit of risk. If you would invest 733.00 in Mednax Inc on September 2, 2024 and sell it today you would earn a total of 763.00 from holding Mednax Inc or generate 104.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mednax Inc vs. EDAP TMS SA
Performance |
| Timeline |
| Mednax Inc |
| EDAP TMS SA |
Mednax and EDAP TMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mednax and EDAP TMS
The main advantage of trading using opposite Mednax and EDAP TMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mednax position performs unexpectedly, EDAP TMS 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 EDAP TMS will offset losses from the drop in EDAP TMS's long position.| Mednax vs. Acadia Healthcare | Mednax vs. Select Medical Holdings | Mednax vs. Universal Health Services | Mednax vs. Prestige Brand Holdings |
| EDAP TMS vs. Profound Medical Corp | EDAP TMS vs. Si Bone | EDAP TMS vs. Nevro Corp | EDAP TMS vs. Orthopediatrics Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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