Correlation Between Medicure and Ceres Global
Can any of the company-specific risk be diversified away by investing in both Medicure and Ceres 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 Ceres Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medicure and Ceres Global Ag, you can compare the effects of market volatilities on Medicure and Ceres 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 Ceres Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medicure and Ceres Global.
Diversification Opportunities for Medicure and Ceres Global
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medicure and Ceres is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Medicure and Ceres Global Ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceres Global Ag 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 Ceres Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceres Global Ag has no effect on the direction of Medicure i.e., Medicure and Ceres Global go up and down completely randomly.
Pair Corralation between Medicure and Ceres Global
Assuming the 90 days horizon Medicure is expected to generate 2.82 times more return on investment than Ceres Global. However, Medicure is 2.82 times more volatile than Ceres Global Ag. It trades about 0.11 of its potential returns per unit of risk. Ceres Global Ag is currently generating about -0.18 per unit of risk. If you would invest 88.00 in Medicure on August 31, 2024 and sell it today you would earn a total of 11.00 from holding Medicure or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medicure vs. Ceres Global Ag
Performance |
| Timeline |
| Medicure |
| Ceres Global Ag |
Medicure and Ceres Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medicure and Ceres Global
The main advantage of trading using opposite Medicure and Ceres Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medicure position performs unexpectedly, Ceres 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 Ceres Global will offset losses from the drop in Ceres Global's long position.| Medicure vs. Biosyent | Medicure vs. Covalon Technologies | Medicure vs. Cipher Pharmaceuticals | Medicure vs. Knight Therapeutics |
| Ceres Global vs. Maple Leaf Foods | Ceres Global vs. Saputo Inc | Ceres Global vs. Forstrong Global Income | Ceres Global vs. iShares Canadian HYBrid |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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