Correlation Between HEALTHCARE TRPFD and MeVis Medical

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

By analyzing existing cross correlation between HEALTHCARE TRPFD SH and MeVis Medical Solutions, you can compare the effects of market volatilities on HEALTHCARE TRPFD and MeVis Medical 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 HEALTHCARE TRPFD with a short position of MeVis Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHCARE TRPFD and MeVis Medical.

Diversification Opportunities for HEALTHCARE TRPFD and MeVis Medical

-0.16

Correlation Coefficient

HEALTHCARE TRPFD  MeVis Medical

Good diversification

The 3 months correlation between HEALTHCARE and MeVis is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHCARE TRPFD SH and MeVis Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeVis Medical Solutions and HEALTHCARE TRPFD 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 HEALTHCARE TRPFD SH are associated (or correlated) with MeVis Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeVis Medical Solutions has no effect on the direction of HEALTHCARE TRPFD i.e., HEALTHCARE TRPFD and MeVis Medical go up and down completely randomly.

Pair Corralation between HEALTHCARE TRPFD and MeVis Medical

Assuming the 90 days horizon HEALTHCARE TRPFD SH is expected to generate 4.2 times more return on investment than MeVis Medical. However, HEALTHCARE TRPFD is 4.2 times more volatile than MeVis Medical Solutions. It trades about 0.33 of its potential returns per unit of risk. MeVis Medical Solutions is currently generating about 0.25 per unit of risk. If you would invest  1,216  in HEALTHCARE TRPFD SH on October 24, 2024 and sell it today you would earn a total of  234.00  from holding HEALTHCARE TRPFD SH or generate 19.24% return on investment over 90 days.

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

HEALTHCARE TRPFD SH  vs.  MeVis Medical Solutions

HEALTHCARE TRPFD

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HEALTHCARE TRPFD SH are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, HEALTHCARE TRPFD may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MeVis Medical Solutions

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MeVis Medical Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MeVis Medical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with HEALTHCARE TRPFD and MeVis Medical

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

The idea behind HEALTHCARE TRPFD SH and MeVis Medical Solutions 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.