Correlation Between TRAINLINE PLC and MEDCAW INVESTMENTS

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

By analyzing existing cross correlation between TRAINLINE PLC LS and MEDCAW INVESTMENTS LS 01, you can compare the effects of market volatilities on TRAINLINE PLC and MEDCAW INVESTMENTS 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 TRAINLINE PLC with a short position of MEDCAW INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and MEDCAW INVESTMENTS.

Diversification Opportunities for TRAINLINE PLC and MEDCAW INVESTMENTS

0.0

Correlation Coefficient

TRAINLINE PLC  MEDCAW INVESTMENTS

Pay attention - limited upside

The 3 months correlation between TRAINLINE and MEDCAW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS and MEDCAW INVESTMENTS LS 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDCAW INVESTMENTS and TRAINLINE PLC 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 TRAINLINE PLC LS are associated (or correlated) with MEDCAW INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDCAW INVESTMENTS has no effect on the direction of TRAINLINE PLC i.e., TRAINLINE PLC and MEDCAW INVESTMENTS go up and down completely randomly.

Pair Corralation between TRAINLINE PLC and MEDCAW INVESTMENTS

Assuming the 90 days trading horizon TRAINLINE PLC LS is expected to generate 0.6 times more return on investment than MEDCAW INVESTMENTS. However, TRAINLINE PLC LS is 1.66 times less risky than MEDCAW INVESTMENTS. It trades about 0.04 of its potential returns per unit of risk. MEDCAW INVESTMENTS LS 01 is currently generating about 0.0 per unit of risk. If you would invest  324.00  in TRAINLINE PLC LS on October 25, 2024 and sell it today you would earn a total of  116.00  from holding TRAINLINE PLC LS or generate 35.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

TRAINLINE PLC LS  vs.  MEDCAW INVESTMENTS LS 01

TRAINLINE PLC LS

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TRAINLINE PLC LS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRAINLINE PLC may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MEDCAW INVESTMENTS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDCAW INVESTMENTS LS 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MEDCAW INVESTMENTS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TRAINLINE PLC and MEDCAW INVESTMENTS

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

The idea behind TRAINLINE PLC LS and MEDCAW INVESTMENTS LS 01 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.