Correlation Between Varex Imaging and Mednax
Can any of the company-specific risk be diversified away by investing in both Varex Imaging 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 Varex Imaging and Mednax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Varex Imaging Corp and Mednax Inc, you can compare the effects of market volatilities on Varex Imaging 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 Varex Imaging with a short position of Mednax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varex Imaging and Mednax.
Diversification Opportunities for Varex Imaging and Mednax
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Varex and Mednax is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Varex Imaging Corp and Mednax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mednax Inc and Varex Imaging 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 Varex Imaging Corp 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 Varex Imaging i.e., Varex Imaging and Mednax go up and down completely randomly.
Pair Corralation between Varex Imaging and Mednax
Given the investment horizon of 90 days Varex Imaging Corp is expected to generate 0.5 times more return on investment than Mednax. However, Varex Imaging Corp is 2.01 times less risky than Mednax. It trades about 0.39 of its potential returns per unit of risk. Mednax Inc is currently generating about 0.14 per unit of risk. If you would invest 1,315 in Varex Imaging Corp on August 28, 2024 and sell it today you would earn a total of 324.00 from holding Varex Imaging Corp or generate 24.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Varex Imaging Corp vs. Mednax Inc
Performance |
| Timeline |
| Varex Imaging Corp |
| Mednax Inc |
Varex Imaging and Mednax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Varex Imaging and Mednax
The main advantage of trading using opposite Varex Imaging and Mednax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varex Imaging 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.| Varex Imaging vs. Sight Sciences | Varex Imaging vs. Apyx Medical | Varex Imaging vs. Si Bone | Varex Imaging vs. Iradimed Co |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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