Correlation Between Pact Group and Medibank Private
Can any of the company-specific risk be diversified away by investing in both Pact Group and Medibank Private 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 Pact Group and Medibank Private into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pact Group Holdings and Medibank Private, you can compare the effects of market volatilities on Pact Group and Medibank Private 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 Pact Group with a short position of Medibank Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pact Group and Medibank Private.
Diversification Opportunities for Pact Group and Medibank Private
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pact and Medibank is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pact Group Holdings and Medibank Private in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medibank Private and Pact Group 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 Pact Group Holdings are associated (or correlated) with Medibank Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medibank Private has no effect on the direction of Pact Group i.e., Pact Group and Medibank Private go up and down completely randomly.
Pair Corralation between Pact Group and Medibank Private
Assuming the 90 days trading horizon Pact Group Holdings is expected to under-perform the Medibank Private. In addition to that, Pact Group is 2.16 times more volatile than Medibank Private. It trades about 0.0 of its total potential returns per unit of risk. Medibank Private is currently generating about 0.06 per unit of volatility. If you would invest 271.00 in Medibank Private on September 13, 2024 and sell it today you would earn a total of 103.00 from holding Medibank Private or generate 38.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pact Group Holdings vs. Medibank Private
Performance |
| Timeline |
| Pact Group Holdings |
| Medibank Private |
Pact Group and Medibank Private Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pact Group and Medibank Private
The main advantage of trading using opposite Pact Group and Medibank Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pact Group position performs unexpectedly, Medibank Private 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 Medibank Private will offset losses from the drop in Medibank Private's long position.| Pact Group vs. Hansen Technologies | Pact Group vs. Ainsworth Game Technology | Pact Group vs. Medical Developments International | Pact Group vs. Readytech Holdings |
| Medibank Private vs. Westpac Banking | Medibank Private vs. National Australia Bank | Medibank Private vs. National Australia Bank | Medibank Private vs. National Australia Bank |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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