Correlation Between MEDICOX and MediaZen

Can any of the company-specific risk be diversified away by investing in both MEDICOX and MediaZen 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 MEDICOX and MediaZen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MEDICOX Co and MediaZen, you can compare the effects of market volatilities on MEDICOX and MediaZen 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 MEDICOX with a short position of MediaZen. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICOX and MediaZen.

Diversification Opportunities for MEDICOX and MediaZen

-0.68

Correlation Coefficient

MEDICOX  MediaZen

Excellent diversification

The 3 months correlation between MEDICOX and MediaZen is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding MEDICOX Co and MediaZen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediaZen and MEDICOX 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 MEDICOX Co are associated (or correlated) with MediaZen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediaZen has no effect on the direction of MEDICOX i.e., MEDICOX and MediaZen go up and down completely randomly.

Pair Corralation between MEDICOX and MediaZen

Assuming the 90 days trading horizon MEDICOX Co is expected to under-perform the MediaZen. In addition to that, MEDICOX is 4.75 times more volatile than MediaZen. It trades about -0.05 of its total potential returns per unit of risk. MediaZen is currently generating about 0.22 per unit of volatility. If you would invest  964,000  in MediaZen on September 15, 2024 and sell it today you would earn a total of  166,000  from holding MediaZen or generate 17.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

MEDICOX Co  vs.  MediaZen

MEDICOX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDICOX Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MediaZen

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MediaZen are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MediaZen sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MEDICOX and MediaZen

The main advantage of trading using opposite MEDICOX and MediaZen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICOX position performs unexpectedly, MediaZen 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 MediaZen will offset losses from the drop in MediaZen's long position.

The idea behind MEDICOX Co and MediaZen pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.