Correlation Between Medicofarma Biotech and Gremi Media
Can any of the company-specific risk be diversified away by investing in both Medicofarma Biotech and Gremi Media 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 Medicofarma Biotech and Gremi Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medicofarma Biotech SA and Gremi Media SA, you can compare the effects of market volatilities on Medicofarma Biotech and Gremi Media 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 Medicofarma Biotech with a short position of Gremi Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medicofarma Biotech and Gremi Media.
Diversification Opportunities for Medicofarma Biotech and Gremi Media
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medicofarma and Gremi is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Medicofarma Biotech SA and Gremi Media SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gremi Media SA and Medicofarma Biotech 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 Medicofarma Biotech SA are associated (or correlated) with Gremi Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gremi Media SA has no effect on the direction of Medicofarma Biotech i.e., Medicofarma Biotech and Gremi Media go up and down completely randomly.
Pair Corralation between Medicofarma Biotech and Gremi Media
Assuming the 90 days trading horizon Medicofarma Biotech SA is expected to generate 10.57 times more return on investment than Gremi Media. However, Medicofarma Biotech is 10.57 times more volatile than Gremi Media SA. It trades about -0.09 of its potential returns per unit of risk. Gremi Media SA is currently generating about -1.21 per unit of risk. If you would invest 33.00 in Medicofarma Biotech SA on November 29, 2024 and sell it today you would lose (6.00) from holding Medicofarma Biotech SA or give up 18.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.45% |
| Values | Daily Returns |
Medicofarma Biotech SA vs. Gremi Media SA
Performance |
| Timeline |
| Medicofarma Biotech |
| Gremi Media SA |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Medicofarma Biotech and Gremi Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medicofarma Biotech and Gremi Media
The main advantage of trading using opposite Medicofarma Biotech and Gremi Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medicofarma Biotech position performs unexpectedly, Gremi Media 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 Gremi Media will offset losses from the drop in Gremi Media's long position.| Medicofarma Biotech vs. LSI Software SA | Medicofarma Biotech vs. Noble Financials SA | Medicofarma Biotech vs. PZ Cormay SA | Medicofarma Biotech vs. Centrum Finansowe Banku |
| Gremi Media vs. Santander Bank Polska | Gremi Media vs. Medicalg | Gremi Media vs. Marie Brizard Wine | Gremi Media vs. ING Bank lski |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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