Correlation Between Quintain Steel and Medigen Biotechnology

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

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

Diversification Opportunities for Quintain Steel and Medigen Biotechnology

0.6

Correlation Coefficient

Quintain Steel  Medigen Biotechnology

Poor diversification

The 3 months correlation between Quintain and Medigen is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Quintain Steel Co and Medigen Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medigen Biotechnology and Quintain Steel 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 Quintain Steel Co are associated (or correlated) with Medigen Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medigen Biotechnology has no effect on the direction of Quintain Steel i.e., Quintain Steel and Medigen Biotechnology go up and down completely randomly.

Pair Corralation between Quintain Steel and Medigen Biotechnology

Assuming the 90 days trading horizon Quintain Steel is expected to generate 4.93 times less return on investment than Medigen Biotechnology. In addition to that, Quintain Steel is 1.01 times more volatile than Medigen Biotechnology. It trades about 0.02 of its total potential returns per unit of risk. Medigen Biotechnology is currently generating about 0.11 per unit of volatility. If you would invest  3,170  in Medigen Biotechnology on December 24, 2024 and sell it today you would earn a total of  380.00  from holding Medigen Biotechnology or generate 11.99% return on investment over 90 days.

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

Quintain Steel Co  vs.  Medigen Biotechnology

Quintain Steel

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quintain Steel Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Quintain Steel is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Medigen Biotechnology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Medigen Biotechnology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Medigen Biotechnology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quintain Steel and Medigen Biotechnology

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

The idea behind Quintain Steel Co and Medigen Biotechnology 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.