Correlation Between Electreon Wireless and MediPress Health

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

By analyzing existing cross correlation between Electreon Wireless and MediPress Health Limited Partnership, you can compare the effects of market volatilities on Electreon Wireless and MediPress Health 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 Electreon Wireless with a short position of MediPress Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electreon Wireless and MediPress Health.

Diversification Opportunities for Electreon Wireless and MediPress Health

-0.06

Correlation Coefficient

Electreon Wireless  MediPress Health

Good diversification

The 3 months correlation between Electreon and MediPress is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Electreon Wireless and MediPress Health Limited Partn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediPress Health Lim and Electreon Wireless 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 Electreon Wireless are associated (or correlated) with MediPress Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediPress Health Lim has no effect on the direction of Electreon Wireless i.e., Electreon Wireless and MediPress Health go up and down completely randomly.

Pair Corralation between Electreon Wireless and MediPress Health

Assuming the 90 days trading horizon Electreon Wireless is expected to under-perform the MediPress Health. In addition to that, Electreon Wireless is 1.43 times more volatile than MediPress Health Limited Partnership. It trades about -0.14 of its total potential returns per unit of risk. MediPress Health Limited Partnership is currently generating about -0.09 per unit of volatility. If you would invest  7,850  in MediPress Health Limited Partnership on December 25, 2024 and sell it today you would lose (1,030) from holding MediPress Health Limited Partnership or give up 13.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.04%
Values	Daily Returns

Electreon Wireless  vs.  MediPress Health Limited Partn

Electreon Wireless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electreon Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MediPress Health Lim

Risk-Adjusted Performance

Very Weak

Over the last 90 days MediPress Health Limited Partnership has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Electreon Wireless and MediPress Health

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

The idea behind Electreon Wireless and MediPress Health Limited Partnership 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.