Correlation Between Mediantechn and Plant Advanced

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

By analyzing existing cross correlation between Mediantechn and Plant Advanced Technologies, you can compare the effects of market volatilities on Mediantechn and Plant Advanced 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 Mediantechn with a short position of Plant Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mediantechn and Plant Advanced.

Diversification Opportunities for Mediantechn and Plant Advanced

0.34

Correlation Coefficient

Mediantechn  Plant Advanced

Weak diversification

The 3 months correlation between Mediantechn and Plant is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mediantechn and Plant Advanced Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plant Advanced Techn and Mediantechn 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 Mediantechn are associated (or correlated) with Plant Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plant Advanced Techn has no effect on the direction of Mediantechn i.e., Mediantechn and Plant Advanced go up and down completely randomly.

Pair Corralation between Mediantechn and Plant Advanced

Assuming the 90 days trading horizon Mediantechn is expected to generate 2.0 times more return on investment than Plant Advanced. However, Mediantechn is 2.0 times more volatile than Plant Advanced Technologies. It trades about 0.12 of its potential returns per unit of risk. Plant Advanced Technologies is currently generating about -0.11 per unit of risk. If you would invest  366.00  in Mediantechn on October 11, 2024 and sell it today you would earn a total of  125.00  from holding Mediantechn or generate 34.15% return on investment over 90 days.

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

Mediantechn  vs.  Plant Advanced Technologies

Mediantechn

Risk-Adjusted Performance

9 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mediantechn are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Mediantechn reported solid returns over the last few months and may actually be approaching a breakup point.

Plant Advanced Techn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Plant Advanced Technologies 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 February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Mediantechn and Plant Advanced

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

The idea behind Mediantechn and Plant Advanced Technologies 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.