Correlation Between INSURANCE AUST and MeVis Medical
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and MeVis 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 INSURANCE AUST and MeVis Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSURANCE AUST GRP and MeVis Medical Solutions, you can compare the effects of market volatilities on INSURANCE AUST and MeVis 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 INSURANCE AUST with a short position of MeVis Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and MeVis Medical.
Diversification Opportunities for INSURANCE AUST and MeVis Medical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INSURANCE and MeVis is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and MeVis Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeVis Medical Solutions and INSURANCE AUST 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 INSURANCE AUST GRP are associated (or correlated) with MeVis Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeVis Medical Solutions has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and MeVis Medical go up and down completely randomly.
Pair Corralation between INSURANCE AUST and MeVis Medical
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to generate 1.41 times more return on investment than MeVis Medical. However, INSURANCE AUST is 1.41 times more volatile than MeVis Medical Solutions. It trades about 0.03 of its potential returns per unit of risk. MeVis Medical Solutions is currently generating about -0.03 per unit of risk. If you would invest 500.00 in INSURANCE AUST GRP on September 20, 2024 and sell it today you would earn a total of 5.00 from holding INSURANCE AUST GRP or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. MeVis Medical Solutions
Performance |
| Timeline |
| INSURANCE AUST GRP |
| MeVis Medical Solutions |
INSURANCE AUST and MeVis Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and MeVis Medical
The main advantage of trading using opposite INSURANCE AUST and MeVis Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, MeVis 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 MeVis Medical will offset losses from the drop in MeVis Medical's long position.| INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Microsoft |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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