Correlation Between MEDIFAST INC and Smart Share
Can any of the company-specific risk be diversified away by investing in both MEDIFAST INC and Smart Share 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 MEDIFAST INC and Smart Share into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDIFAST INC and Smart Share Global, you can compare the effects of market volatilities on MEDIFAST INC and Smart Share 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 MEDIFAST INC with a short position of Smart Share. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDIFAST INC and Smart Share.
Diversification Opportunities for MEDIFAST INC and Smart Share
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MEDIFAST and Smart is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding MEDIFAST INC and Smart Share Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart Share Global and MEDIFAST INC 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 MEDIFAST INC are associated (or correlated) with Smart Share. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart Share Global has no effect on the direction of MEDIFAST INC i.e., MEDIFAST INC and Smart Share go up and down completely randomly.
Pair Corralation between MEDIFAST INC and Smart Share
Considering the 90-day investment horizon MEDIFAST INC is expected to generate 1.32 times more return on investment than Smart Share. However, MEDIFAST INC is 1.32 times more volatile than Smart Share Global. It trades about 0.08 of its potential returns per unit of risk. Smart Share Global is currently generating about -0.06 per unit of risk. If you would invest 1,851 in MEDIFAST INC on August 30, 2024 and sell it today you would earn a total of 93.00 from holding MEDIFAST INC or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MEDIFAST INC vs. Smart Share Global
Performance |
| Timeline |
| MEDIFAST INC |
| Smart Share Global |
MEDIFAST INC and Smart Share Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDIFAST INC and Smart Share
The main advantage of trading using opposite MEDIFAST INC and Smart Share positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDIFAST INC position performs unexpectedly, Smart Share 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 Smart Share will offset losses from the drop in Smart Share's long position.| MEDIFAST INC vs. Rollins | MEDIFAST INC vs. Carriage Services | MEDIFAST INC vs. Service International | MEDIFAST INC vs. Bright Horizons Family |
| Smart Share vs. Frontdoor | Smart Share vs. Bright Horizons Family | Smart Share vs. Mister Car Wash | Smart Share vs. Carriage Services |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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