Correlation Between Mediantechn and Medincell

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

By analyzing existing cross correlation between Mediantechn and Medincell SA, you can compare the effects of market volatilities on Mediantechn and Medincell 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 Medincell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mediantechn and Medincell.

Diversification Opportunities for Mediantechn and Medincell

-0.36

Correlation Coefficient

Mediantechn  Medincell

Very good diversification

The 3 months correlation between Mediantechn and Medincell is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mediantechn and Medincell SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medincell SA 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 Medincell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medincell SA has no effect on the direction of Mediantechn i.e., Mediantechn and Medincell go up and down completely randomly.

Pair Corralation between Mediantechn and Medincell

Assuming the 90 days trading horizon Mediantechn is expected to under-perform the Medincell. In addition to that, Mediantechn is 1.67 times more volatile than Medincell SA. It trades about -0.07 of its total potential returns per unit of risk. Medincell SA is currently generating about -0.01 per unit of volatility. If you would invest  1,606  in Medincell SA on September 13, 2024 and sell it today you would lose (54.00) from holding Medincell SA or give up 3.36% of portfolio value over 90 days.

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

Mediantechn  vs.  Medincell SA

Mediantechn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mediantechn 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.

Medincell SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mediantechn and Medincell

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

The idea behind Mediantechn and Medincell SA 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.