Correlation Between Broadwind and MEDCAW INVESTMENTS

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

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

Diversification Opportunities for Broadwind and MEDCAW INVESTMENTS

0.0

Correlation Coefficient

Broadwind  MEDCAW INVESTMENTS

Pay attention - limited upside

The 3 months correlation between Broadwind and MEDCAW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Broadwind 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 Broadwind 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 Broadwind 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 Broadwind i.e., Broadwind and MEDCAW INVESTMENTS go up and down completely randomly.

Pair Corralation between Broadwind and MEDCAW INVESTMENTS

Assuming the 90 days trading horizon Broadwind is expected to under-perform the MEDCAW INVESTMENTS. In addition to that, Broadwind is 1.04 times more volatile than MEDCAW INVESTMENTS LS 01. It trades about -0.02 of its total potential returns per unit of risk. MEDCAW INVESTMENTS LS 01 is currently generating about 0.0 per unit of volatility. If you would invest  6.60  in MEDCAW INVESTMENTS LS 01 on October 25, 2024 and sell it today you would lose (2.55) from holding MEDCAW INVESTMENTS LS 01 or give up 38.64% of portfolio value over 90 days.

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

Broadwind  vs.  MEDCAW INVESTMENTS LS 01

Broadwind

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 Broadwind and MEDCAW INVESTMENTS

The main advantage of trading using opposite Broadwind and MEDCAW INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadwind 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 Broadwind 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.