Correlation Between Medicalg and Kool2play
Can any of the company-specific risk be diversified away by investing in both Medicalg and Kool2play 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 Medicalg and Kool2play into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medicalg and Kool2play SA, you can compare the effects of market volatilities on Medicalg and Kool2play 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 Medicalg with a short position of Kool2play. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medicalg and Kool2play.
Diversification Opportunities for Medicalg and Kool2play
Poor diversification
The 3 months correlation between Medicalg and Kool2play is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Medicalg and Kool2play SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kool2play SA and Medicalg 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 Medicalg are associated (or correlated) with Kool2play. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kool2play SA has no effect on the direction of Medicalg i.e., Medicalg and Kool2play go up and down completely randomly.
Pair Corralation between Medicalg and Kool2play
Assuming the 90 days trading horizon Medicalg is expected to under-perform the Kool2play. In addition to that, Medicalg is 1.24 times more volatile than Kool2play SA. It trades about -0.09 of its total potential returns per unit of risk. Kool2play SA is currently generating about -0.09 per unit of volatility. If you would invest 117.00 in Kool2play SA on September 12, 2024 and sell it today you would lose (18.00) from holding Kool2play SA or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 84.13% |
| Values | Daily Returns |
Medicalg vs. Kool2play SA
Performance |
| Timeline |
| Medicalg |
| Kool2play SA |
Medicalg and Kool2play Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medicalg and Kool2play
The main advantage of trading using opposite Medicalg and Kool2play positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medicalg position performs unexpectedly, Kool2play 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 Kool2play will offset losses from the drop in Kool2play's long position.| Medicalg vs. Quantum Software SA | Medicalg vs. Inter Cars SA | Medicalg vs. Movie Games SA | Medicalg vs. Gamedust SA |
| Kool2play vs. Movie Games SA | Kool2play vs. CI Games SA | Kool2play vs. Gaming Factory SA | Kool2play vs. True Games Syndicate |
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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