Correlation Between REMEDY ENTERTAINMENT and MidCap Financial
Can any of the company-specific risk be diversified away by investing in both REMEDY ENTERTAINMENT and MidCap Financial 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 REMEDY ENTERTAINMENT and MidCap Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REMEDY ENTERTAINMENT OYJ and MidCap Financial Investment, you can compare the effects of market volatilities on REMEDY ENTERTAINMENT and MidCap Financial 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 REMEDY ENTERTAINMENT with a short position of MidCap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of REMEDY ENTERTAINMENT and MidCap Financial.
Diversification Opportunities for REMEDY ENTERTAINMENT and MidCap Financial
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between REMEDY and MidCap is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding REMEDY ENTERTAINMENT OYJ and MidCap Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MidCap Financial Inv and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT OYJ are associated (or correlated) with MidCap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MidCap Financial Inv has no effect on the direction of REMEDY ENTERTAINMENT i.e., REMEDY ENTERTAINMENT and MidCap Financial go up and down completely randomly.
Pair Corralation between REMEDY ENTERTAINMENT and MidCap Financial
Assuming the 90 days horizon REMEDY ENTERTAINMENT OYJ is expected to under-perform the MidCap Financial. In addition to that, REMEDY ENTERTAINMENT is 1.99 times more volatile than MidCap Financial Investment. It trades about -0.06 of its total potential returns per unit of risk. MidCap Financial Investment is currently generating about 0.12 per unit of volatility. If you would invest 1,215 in MidCap Financial Investment on October 26, 2024 and sell it today you would earn a total of 99.00 from holding MidCap Financial Investment or generate 8.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
REMEDY ENTERTAINMENT OYJ vs. MidCap Financial Investment
Performance |
Timeline |
REMEDY ENTERTAINMENT OYJ |
MidCap Financial Inv |
REMEDY ENTERTAINMENT and MidCap Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with REMEDY ENTERTAINMENT and MidCap Financial
The main advantage of trading using opposite REMEDY ENTERTAINMENT and MidCap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REMEDY ENTERTAINMENT position performs unexpectedly, MidCap Financial 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 MidCap Financial will offset losses from the drop in MidCap Financial's long position.REMEDY ENTERTAINMENT vs. GLG LIFE TECH | REMEDY ENTERTAINMENT vs. Sunny Optical Technology | REMEDY ENTERTAINMENT vs. REVO INSURANCE SPA | REMEDY ENTERTAINMENT vs. CDN IMPERIAL BANK |
MidCap Financial vs. BII Railway Transportation | MidCap Financial vs. Gaztransport Technigaz SA | MidCap Financial vs. COPLAND ROAD CAPITAL | MidCap Financial vs. Television Broadcasts Limited |
Check out your portfolio center.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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