Correlation Between Medicure and Century Global
Can any of the company-specific risk be diversified away by investing in both Medicure and Century Global 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 Medicure and Century Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medicure and Century Global Commodities, you can compare the effects of market volatilities on Medicure and Century Global 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 Medicure with a short position of Century Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medicure and Century Global.
Diversification Opportunities for Medicure and Century Global
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medicure and Century is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Medicure and Century Global Commodities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Global Commo and Medicure 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 Medicure are associated (or correlated) with Century Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Global Commo has no effect on the direction of Medicure i.e., Medicure and Century Global go up and down completely randomly.
Pair Corralation between Medicure and Century Global
Assuming the 90 days horizon Medicure is expected to under-perform the Century Global. But the stock apears to be less risky and, when comparing its historical volatility, Medicure is 1.57 times less risky than Century Global. The stock trades about -0.01 of its potential returns per unit of risk. The Century Global Commodities is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Century Global Commodities on September 14, 2024 and sell it today you would lose (1.00) from holding Century Global Commodities or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medicure vs. Century Global Commodities
Performance |
| Timeline |
| Medicure |
| Century Global Commo |
Medicure and Century Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medicure and Century Global
The main advantage of trading using opposite Medicure and Century Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medicure position performs unexpectedly, Century Global 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 Century Global will offset losses from the drop in Century Global's long position.| Medicure vs. Decibel Cannabis | Medicure vs. iShares Canadian HYBrid | Medicure vs. Altagas Cum Red | Medicure vs. iShares Fundamental Hedged |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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