Correlation Between MeVis Medical and Corteva

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

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

Diversification Opportunities for MeVis Medical and Corteva

0.45

Correlation Coefficient

MeVis Medical  Corteva

Very weak diversification

The 3 months correlation between MeVis and Corteva is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and Corteva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corteva and MeVis Medical 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 MeVis Medical Solutions are associated (or correlated) with Corteva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corteva has no effect on the direction of MeVis Medical i.e., MeVis Medical and Corteva go up and down completely randomly.

Pair Corralation between MeVis Medical and Corteva

Assuming the 90 days trading horizon MeVis Medical Solutions is expected to under-perform the Corteva. But the stock apears to be less risky and, when comparing its historical volatility, MeVis Medical Solutions is 2.13 times less risky than Corteva. The stock trades about -0.04 of its potential returns per unit of risk. The Corteva is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  5,465  in Corteva on October 10, 2024 and sell it today you would earn a total of  89.00  from holding Corteva or generate 1.63% return on investment over 90 days.

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

MeVis Medical Solutions  vs.  Corteva

MeVis Medical Solutions

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MeVis Medical Solutions are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MeVis Medical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Corteva

Risk-Adjusted Performance

5 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Corteva are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Corteva may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with MeVis Medical and Corteva

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

The idea behind MeVis Medical Solutions and Corteva 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.