Correlation Between MOVIE GAMES and MEDICAL FACILITIES

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

By analyzing existing cross correlation between MOVIE GAMES SA and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on MOVIE GAMES and MEDICAL FACILITIES 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 MOVIE GAMES with a short position of MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOVIE GAMES and MEDICAL FACILITIES.

Diversification Opportunities for MOVIE GAMES and MEDICAL FACILITIES

-0.75

Correlation Coefficient

MOVIE GAMES  MEDICAL FACILITIES

Pay attention - limited upside

The 3 months correlation between MOVIE and MEDICAL is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW and MOVIE GAMES 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 MOVIE GAMES SA are associated (or correlated) with MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of MOVIE GAMES i.e., MOVIE GAMES and MEDICAL FACILITIES go up and down completely randomly.

Pair Corralation between MOVIE GAMES and MEDICAL FACILITIES

Assuming the 90 days horizon MOVIE GAMES SA is expected to generate 4.17 times more return on investment than MEDICAL FACILITIES. However, MOVIE GAMES is 4.17 times more volatile than MEDICAL FACILITIES NEW. It trades about 0.2 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about -0.03 per unit of risk. If you would invest  337.00  in MOVIE GAMES SA on October 11, 2024 and sell it today you would earn a total of  75.00  from holding MOVIE GAMES SA or generate 22.26% return on investment over 90 days.

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

MOVIE GAMES SA  vs.  MEDICAL FACILITIES NEW

MOVIE GAMES SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MOVIE GAMES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MOVIE GAMES is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

MEDICAL FACILITIES NEW

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MEDICAL FACILITIES NEW are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MEDICAL FACILITIES may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with MOVIE GAMES and MEDICAL FACILITIES

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

The idea behind MOVIE GAMES SA and MEDICAL FACILITIES NEW 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.