Correlation Between Diagnostic Medical and Hotel Majestic

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

By analyzing existing cross correlation between Diagnostic Medical Systems and Hotel Majestic Cannes, you can compare the effects of market volatilities on Diagnostic Medical and Hotel Majestic 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 Diagnostic Medical with a short position of Hotel Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diagnostic Medical and Hotel Majestic.

Diversification Opportunities for Diagnostic Medical and Hotel Majestic

0.29

Correlation Coefficient

Diagnostic Medical  Hotel Majestic

Modest diversification

The 3 months correlation between Diagnostic and Hotel is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Diagnostic Medical Systems and Hotel Majestic Cannes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Majestic Cannes and Diagnostic Medical 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 Diagnostic Medical Systems are associated (or correlated) with Hotel Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Majestic Cannes has no effect on the direction of Diagnostic Medical i.e., Diagnostic Medical and Hotel Majestic go up and down completely randomly.

Pair Corralation between Diagnostic Medical and Hotel Majestic

If you would invest  75.00  in Diagnostic Medical Systems on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Diagnostic Medical Systems or generate 0.0% return on investment over 90 days.

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

Diagnostic Medical Systems  vs.  Hotel Majestic Cannes

Diagnostic Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Diagnostic Medical Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Hotel Majestic Cannes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hotel Majestic Cannes has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Hotel Majestic is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Diagnostic Medical and Hotel Majestic

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

The idea behind Diagnostic Medical Systems and Hotel Majestic Cannes 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.