Correlation Between Mango Excellent and CareRay Digital

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

By analyzing existing cross correlation between Mango Excellent Media and CareRay Digital Medical, you can compare the effects of market volatilities on Mango Excellent and CareRay Digital 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 Mango Excellent with a short position of CareRay Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mango Excellent and CareRay Digital.

Diversification Opportunities for Mango Excellent and CareRay Digital

0.88

Correlation Coefficient

Mango Excellent  CareRay Digital

Very poor diversification

The 3 months correlation between Mango and CareRay is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mango Excellent Media and CareRay Digital Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareRay Digital Medical and Mango Excellent 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 Mango Excellent Media are associated (or correlated) with CareRay Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareRay Digital Medical has no effect on the direction of Mango Excellent i.e., Mango Excellent and CareRay Digital go up and down completely randomly.

Pair Corralation between Mango Excellent and CareRay Digital

Assuming the 90 days trading horizon Mango Excellent Media is expected to under-perform the CareRay Digital. In addition to that, Mango Excellent is 1.18 times more volatile than CareRay Digital Medical. It trades about -0.06 of its total potential returns per unit of risk. CareRay Digital Medical is currently generating about -0.05 per unit of volatility. If you would invest  1,427  in CareRay Digital Medical on October 6, 2024 and sell it today you would lose (151.00) from holding CareRay Digital Medical or give up 10.58% of portfolio value over 90 days.

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

Mango Excellent Media  vs.  CareRay Digital Medical

Mango Excellent Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mango Excellent Media 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

CareRay Digital Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CareRay Digital Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Mango Excellent and CareRay Digital

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

The idea behind Mango Excellent Media and CareRay Digital Medical 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.