Correlation Between Carrefour and Medincell

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

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

Diversification Opportunities for Carrefour and Medincell

0.57

Correlation Coefficient

Carrefour  Medincell

Very weak diversification

The 3 months correlation between Carrefour and Medincell is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Carrefour SA and Medincell SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medincell SA and Carrefour 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 Carrefour SA 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 Carrefour i.e., Carrefour and Medincell go up and down completely randomly.

Pair Corralation between Carrefour and Medincell

Assuming the 90 days horizon Carrefour SA is expected to generate 0.68 times more return on investment than Medincell. However, Carrefour SA is 1.48 times less risky than Medincell. It trades about -0.01 of its potential returns per unit of risk. Medincell SA is currently generating about -0.06 per unit of risk. If you would invest  1,357  in Carrefour SA on December 30, 2024 and sell it today you would lose (31.00) from holding Carrefour SA or give up 2.28% of portfolio value over 90 days.

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

Carrefour SA  vs.  Medincell SA

Carrefour SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carrefour SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Carrefour is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Medincell SA

Risk-Adjusted Performance

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 latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Carrefour and Medincell

The main advantage of trading using opposite Carrefour and Medincell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carrefour 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 Carrefour SA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.