Correlation Between MEDIPOST and Finetechnix CoLtd

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

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

Diversification Opportunities for MEDIPOST and Finetechnix CoLtd

-0.46

Correlation Coefficient

MEDIPOST  Finetechnix CoLtd

Very good diversification

The 3 months correlation between MEDIPOST and Finetechnix is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding MEDIPOST Co and Finetechnix CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finetechnix CoLtd and MEDIPOST 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 MEDIPOST Co are associated (or correlated) with Finetechnix CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finetechnix CoLtd has no effect on the direction of MEDIPOST i.e., MEDIPOST and Finetechnix CoLtd go up and down completely randomly.

Pair Corralation between MEDIPOST and Finetechnix CoLtd

Assuming the 90 days trading horizon MEDIPOST is expected to generate 3.42 times less return on investment than Finetechnix CoLtd. But when comparing it to its historical volatility, MEDIPOST Co is 1.15 times less risky than Finetechnix CoLtd. It trades about 0.11 of its potential returns per unit of risk. Finetechnix CoLtd is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  76,600  in Finetechnix CoLtd on October 12, 2024 and sell it today you would earn a total of  56,600  from holding Finetechnix CoLtd or generate 73.89% return on investment over 90 days.

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

MEDIPOST Co  vs.  Finetechnix CoLtd

MEDIPOST

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MEDIPOST Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MEDIPOST sustained solid returns over the last few months and may actually be approaching a breakup point.

Finetechnix CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Finetechnix CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Finetechnix CoLtd is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MEDIPOST and Finetechnix CoLtd

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

The idea behind MEDIPOST Co and Finetechnix CoLtd 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.