Correlation Between DOD Biotech and Intermedical Care

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

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

Diversification Opportunities for DOD Biotech and Intermedical Care

0.59

Correlation Coefficient

DOD Biotech  Intermedical Care

Very weak diversification

The 3 months correlation between DOD and Intermedical is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding DOD Biotech Public and Intermedical Care and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermedical Care and DOD Biotech 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 DOD Biotech Public are associated (or correlated) with Intermedical Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermedical Care has no effect on the direction of DOD Biotech i.e., DOD Biotech and Intermedical Care go up and down completely randomly.

Pair Corralation between DOD Biotech and Intermedical Care

Assuming the 90 days trading horizon DOD Biotech Public is expected to under-perform the Intermedical Care. In addition to that, DOD Biotech is 2.14 times more volatile than Intermedical Care and. It trades about -0.21 of its total potential returns per unit of risk. Intermedical Care and is currently generating about -0.24 per unit of volatility. If you would invest  478.00  in Intermedical Care and on December 24, 2024 and sell it today you would lose (62.00) from holding Intermedical Care and or give up 12.97% of portfolio value over 90 days.

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

DOD Biotech Public  vs.  Intermedical Care and

DOD Biotech Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days DOD Biotech Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Intermedical Care

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intermedical Care and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with DOD Biotech and Intermedical Care

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

The idea behind DOD Biotech Public and Intermedical Care and 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.