Correlation Between Medicalg and Novavis Group
Can any of the company-specific risk be diversified away by investing in both Medicalg and Novavis Group 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 Novavis Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medicalg and Novavis Group SA, you can compare the effects of market volatilities on Medicalg and Novavis Group 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 Novavis Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medicalg and Novavis Group.
Diversification Opportunities for Medicalg and Novavis Group
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Medicalg and Novavis is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Medicalg and Novavis Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavis Group 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 Novavis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novavis Group SA has no effect on the direction of Medicalg i.e., Medicalg and Novavis Group go up and down completely randomly.
Pair Corralation between Medicalg and Novavis Group
Assuming the 90 days trading horizon Medicalg is expected to under-perform the Novavis Group. In addition to that, Medicalg is 2.7 times more volatile than Novavis Group SA. It trades about -0.17 of its total potential returns per unit of risk. Novavis Group SA is currently generating about -0.15 per unit of volatility. If you would invest 175.00 in Novavis Group SA on September 1, 2024 and sell it today you would lose (9.00) from holding Novavis Group SA or give up 5.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medicalg vs. Novavis Group SA
Performance |
| Timeline |
| Medicalg |
| Novavis Group SA |
Medicalg and Novavis Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medicalg and Novavis Group
The main advantage of trading using opposite Medicalg and Novavis Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medicalg position performs unexpectedly, Novavis Group 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 Novavis Group will offset losses from the drop in Novavis Group's long position.| Medicalg vs. Asseco Business Solutions | Medicalg vs. Detalion Games SA | Medicalg vs. Asseco South Eastern | Medicalg vs. CFI Holding SA |
| Novavis Group vs. Medicalg | Novavis Group vs. Globe Trade Centre | Novavis Group vs. MW Trade SA | Novavis Group vs. Intersport Polska SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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