Correlation Between Medical Developments and Actinogen Medical

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Can any of the company-specific risk be diversified away by investing in both Medical Developments and Actinogen 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 Medical Developments and Actinogen Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Developments International and Actinogen Medical, you can compare the effects of market volatilities on Medical Developments and Actinogen 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 Medical Developments with a short position of Actinogen Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Developments and Actinogen Medical.

Diversification Opportunities for Medical Developments and Actinogen Medical

MedicalActinogenDiversified AwayMedicalActinogenDiversified Away100%
0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between Medical and Actinogen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Medical Developments Internati and Actinogen Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actinogen Medical and Medical Developments 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 Medical Developments International are associated (or correlated) with Actinogen Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actinogen Medical has no effect on the direction of Medical Developments i.e., Medical Developments and Actinogen Medical go up and down completely randomly.

Pair Corralation between Medical Developments and Actinogen Medical

Assuming the 90 days trading horizon Medical Developments International is expected to under-perform the Actinogen Medical. But the stock apears to be less risky and, when comparing its historical volatility, Medical Developments International is 1.53 times less risky than Actinogen Medical. The stock trades about 0.0 of its potential returns per unit of risk. The Actinogen Medical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  6.34  in Actinogen Medical on November 30, 2024 and sell it today you would lose (2.34) from holding Actinogen Medical or give up 36.91% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Medical Developments Internati  vs.  Actinogen Medical

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -40-30-20-100102030
JavaScript chart by amCharts 3.21.15MVP ACW
       Timeline  
Medical Developments 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Medical Developments International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Medical Developments unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.40.50.60.70.80.9
Actinogen Medical 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Actinogen Medical are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Actinogen Medical unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.0250.030.0350.04

Medical Developments and Actinogen Medical Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-26.54-19.88-13.21-6.550.116.8713.9821.0828.1935.29 0.0040.0060.0080.0100.0120.014
JavaScript chart by amCharts 3.21.15MVP ACW
       Returns  

Pair Trading with Medical Developments and Actinogen Medical

The main advantage of trading using opposite Medical Developments and Actinogen Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Developments position performs unexpectedly, Actinogen 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 Actinogen Medical will offset losses from the drop in Actinogen Medical's long position.
The idea behind Medical Developments International and Actinogen Medical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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