Correlation Between MediaZen and MEDICOX

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

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

Diversification Opportunities for MediaZen and MEDICOX

-0.68

Correlation Coefficient

MediaZen  MEDICOX

Excellent diversification

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

Pair Corralation between MediaZen and MEDICOX

Assuming the 90 days trading horizon MediaZen is expected to generate 0.21 times more return on investment than MEDICOX. However, MediaZen is 4.75 times less risky than MEDICOX. It trades about 0.22 of its potential returns per unit of risk. MEDICOX Co is currently generating about -0.05 per unit of risk. 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

MediaZen  vs.  MEDICOX Co

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.

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.

Pair Trading with MediaZen and MEDICOX

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

The idea behind MediaZen and MEDICOX Co 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.