Correlation Between Manitou BF and Diagnostic Medical
Can any of the company-specific risk be diversified away by investing in both Manitou BF and Diagnostic Medical 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 Manitou BF and Diagnostic Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitou BF SA and Diagnostic Medical Systems, you can compare the effects of market volatilities on Manitou BF and Diagnostic Medical 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 Manitou BF with a short position of Diagnostic Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and Diagnostic Medical.
Diversification Opportunities for Manitou BF and Diagnostic Medical
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Manitou and Diagnostic is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Diagnostic Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diagnostic Medical and Manitou BF 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 Manitou BF SA are associated (or correlated) with Diagnostic Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diagnostic Medical has no effect on the direction of Manitou BF i.e., Manitou BF and Diagnostic Medical go up and down completely randomly.
Pair Corralation between Manitou BF and Diagnostic Medical
Assuming the 90 days trading horizon Manitou BF SA is expected to generate 0.47 times more return on investment than Diagnostic Medical. However, Manitou BF SA is 2.13 times less risky than Diagnostic Medical. It trades about -0.18 of its potential returns per unit of risk. Diagnostic Medical Systems is currently generating about -0.1 per unit of risk. If you would invest 1,700 in Manitou BF SA on September 2, 2024 and sell it today you would lose (130.00) from holding Manitou BF SA or give up 7.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manitou BF SA vs. Diagnostic Medical Systems
Performance |
| Timeline |
| Manitou BF SA |
| Diagnostic Medical |
Manitou BF and Diagnostic Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitou BF and Diagnostic Medical
The main advantage of trading using opposite Manitou BF and Diagnostic Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitou BF position performs unexpectedly, Diagnostic Medical 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 Diagnostic Medical will offset losses from the drop in Diagnostic Medical's long position.| Manitou BF vs. Air Liquide SA | Manitou BF vs. Vinci SA | Manitou BF vs. LOreal SA | Manitou BF vs. Compagnie de Saint Gobain |
| Diagnostic Medical vs. Linedata Services SA | Diagnostic Medical vs. Fill Up Media | Diagnostic Medical vs. DONTNOD Entertainment SA | Diagnostic Medical vs. Veolia Environnement VE |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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