Correlation Between Nasdaq and Mednow
Can any of the company-specific risk be diversified away by investing in both Nasdaq and Mednow 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 Nasdaq and Mednow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Mednow Inc, you can compare the effects of market volatilities on Nasdaq and Mednow 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 Nasdaq with a short position of Mednow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Mednow.
Diversification Opportunities for Nasdaq and Mednow
Pay attention - limited upside
The 3 months correlation between Nasdaq and Mednow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Mednow Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mednow Inc and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Mednow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mednow Inc has no effect on the direction of Nasdaq i.e., Nasdaq and Mednow go up and down completely randomly.
Pair Corralation between Nasdaq and Mednow
Given the investment horizon of 90 days Nasdaq is expected to generate 25.96 times less return on investment than Mednow. But when comparing it to its historical volatility, Nasdaq Inc is 51.23 times less risky than Mednow. It trades about 0.14 of its potential returns per unit of risk. Mednow Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1.01 in Mednow Inc on November 3, 2024 and sell it today you would earn a total of 0.99 from holding Mednow Inc or generate 98.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Nasdaq Inc vs. Mednow Inc
Performance |
| Timeline |
| Nasdaq Inc |
| Mednow Inc |
Nasdaq and Mednow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Mednow
The main advantage of trading using opposite Nasdaq and Mednow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Mednow 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 Mednow will offset losses from the drop in Mednow's long position.The idea behind Nasdaq Inc and Mednow Inc 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.| Mednow vs. Wizz Air Holdings | Mednow vs. Corsair Gaming | Mednow vs. ioneer Ltd American | Mednow vs. Air Lease |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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