Correlation Between Medibank Private and Staude Capital
Can any of the company-specific risk be diversified away by investing in both Medibank Private and Staude Capital 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 Medibank Private and Staude Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medibank Private and Staude Capital Global, you can compare the effects of market volatilities on Medibank Private and Staude Capital 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 Medibank Private with a short position of Staude Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medibank Private and Staude Capital.
Diversification Opportunities for Medibank Private and Staude Capital
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Medibank and Staude is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Medibank Private and Staude Capital Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staude Capital Global and Medibank Private 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 Medibank Private are associated (or correlated) with Staude Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staude Capital Global has no effect on the direction of Medibank Private i.e., Medibank Private and Staude Capital go up and down completely randomly.
Pair Corralation between Medibank Private and Staude Capital
Assuming the 90 days trading horizon Medibank Private is expected to generate 0.97 times more return on investment than Staude Capital. However, Medibank Private is 1.03 times less risky than Staude Capital. It trades about 0.06 of its potential returns per unit of risk. Staude Capital Global is currently generating about -0.2 per unit of risk. If you would invest 376.00 in Medibank Private on October 21, 2024 and sell it today you would earn a total of 3.00 from holding Medibank Private or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medibank Private vs. Staude Capital Global
Performance |
| Timeline |
| Medibank Private |
| Staude Capital Global |
Medibank Private and Staude Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medibank Private and Staude Capital
The main advantage of trading using opposite Medibank Private and Staude Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medibank Private position performs unexpectedly, Staude Capital 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 Staude Capital will offset losses from the drop in Staude Capital's long position.| Medibank Private vs. Bio Gene Technology | Medibank Private vs. Aeon Metals | Medibank Private vs. Centrex Metals | Medibank Private vs. Macquarie Technology Group |
| Staude Capital vs. Aneka Tambang Tbk | Staude Capital vs. Commonwealth Bank of | Staude Capital vs. Australia and New | Staude Capital vs. ANZ Group Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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