Correlation Between Packaging and MeVis Medical
Can any of the company-specific risk be diversified away by investing in both Packaging 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 Packaging and MeVis Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Packaging of and MeVis Medical Solutions, you can compare the effects of market volatilities on Packaging 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 Packaging with a short position of MeVis Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Packaging and MeVis Medical.
Diversification Opportunities for Packaging and MeVis Medical
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Packaging and MeVis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Packaging of 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 Packaging 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 Packaging of 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 Packaging i.e., Packaging and MeVis Medical go up and down completely randomly.
Pair Corralation between Packaging and MeVis Medical
Assuming the 90 days horizon Packaging of is expected to generate 1.22 times more return on investment than MeVis Medical. However, Packaging is 1.22 times more volatile than MeVis Medical Solutions. It trades about 0.18 of its potential returns per unit of risk. MeVis Medical Solutions is currently generating about -0.06 per unit of risk. If you would invest 17,002 in Packaging of on September 13, 2024 and sell it today you would earn a total of 5,578 from holding Packaging of or generate 32.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Packaging of vs. MeVis Medical Solutions
Performance |
| Timeline |
| Packaging |
| MeVis Medical Solutions |
Packaging and MeVis Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Packaging and MeVis Medical
The main advantage of trading using opposite Packaging and MeVis Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Packaging 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.| Packaging vs. Graphic Packaging Holding | Packaging vs. Superior Plus Corp | Packaging vs. SIVERS SEMICONDUCTORS AB | Packaging vs. Norsk Hydro ASA |
| MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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