Correlation Between HP and Medicure

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

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

Diversification Opportunities for HP and Medicure

0.55

Correlation Coefficient

HP  Medicure

Very weak diversification

The 3 months correlation between HP and Medicure is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Medicure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicure and HP 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 HP Inc are associated (or correlated) with Medicure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicure has no effect on the direction of HP i.e., HP and Medicure go up and down completely randomly.

Pair Corralation between HP and Medicure

Considering the 90-day investment horizon HP Inc is expected to under-perform the Medicure. In addition to that, HP is 1.07 times more volatile than Medicure. It trades about -0.12 of its total potential returns per unit of risk. Medicure is currently generating about 0.01 per unit of volatility. If you would invest  53.00  in Medicure on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Medicure or generate 0.0% return on investment over 90 days.

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

HP Inc  vs.  Medicure

HP Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days HP Inc 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 April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Medicure

Risk-Adjusted Performance

Very Weak

Over the last 90 days Medicure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with HP and Medicure

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

The idea behind HP Inc and Medicure 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.