Correlation Between NYSE Composite and Mednax
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Mednax 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 NYSE Composite and Mednax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Mednax Inc, you can compare the effects of market volatilities on NYSE Composite and Mednax 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 NYSE Composite with a short position of Mednax. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Mednax.
Diversification Opportunities for NYSE Composite and Mednax
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Mednax is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Mednax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mednax Inc and NYSE Composite 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 NYSE Composite are associated (or correlated) with Mednax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mednax Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and Mednax go up and down completely randomly.
Pair Corralation between NYSE Composite and Mednax
Assuming the 90 days trading horizon NYSE Composite is expected to generate 7.96 times less return on investment than Mednax. But when comparing it to its historical volatility, NYSE Composite is 6.82 times less risky than Mednax. It trades about 0.14 of its potential returns per unit of risk. Mednax Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,136 in Mednax Inc on August 27, 2024 and sell it today you would earn a total of 340.00 from holding Mednax Inc or generate 29.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Mednax Inc
Performance |
| Timeline |
NYSE Composite and Mednax Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Mednax Inc
Pair trading matchups for Mednax
Pair Trading with NYSE Composite and Mednax
The main advantage of trading using opposite NYSE Composite and Mednax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Mednax 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 Mednax will offset losses from the drop in Mednax's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Mednax vs. Acadia Healthcare | Mednax vs. Select Medical Holdings | Mednax vs. Universal Health Services | Mednax vs. Prestige Brand 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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