Correlation Between Imed Infinity and MediPress Health

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

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

Diversification Opportunities for Imed Infinity and MediPress Health

0.25

Correlation Coefficient

Imed Infinity  MediPress Health

Modest diversification

The 3 months correlation between Imed and MediPress is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Imed Infinity Medical Limited 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 Imed Infinity 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 Imed Infinity Medical Limited 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 Imed Infinity i.e., Imed Infinity and MediPress Health go up and down completely randomly.

Pair Corralation between Imed Infinity and MediPress Health

Assuming the 90 days trading horizon Imed Infinity Medical Limited is expected to under-perform the MediPress Health. In addition to that, Imed Infinity is 2.1 times more volatile than MediPress Health Limited Partnership. It trades about -0.16 of its total potential returns per unit of risk. MediPress Health Limited Partnership is currently generating about -0.07 per unit of volatility. If you would invest  7,850  in MediPress Health Limited Partnership on December 23, 2024 and sell it today you would lose (800.00) from holding MediPress Health Limited Partnership or give up 10.19% of portfolio value over 90 days.

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

Imed Infinity Medical Limited  vs.  MediPress Health Limited Partn

Imed Infinity Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Imed Infinity Medical Limited 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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Imed Infinity and MediPress Health

The main advantage of trading using opposite Imed Infinity and MediPress Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imed Infinity 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 Imed Infinity Medical Limited 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.

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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.