Correlation Between MeVis Medical and Penn National
Can any of the company-specific risk be diversified away by investing in both MeVis Medical and Penn National 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 Penn National 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 Penn National Gaming, you can compare the effects of market volatilities on MeVis Medical and Penn National 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 Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and Penn National.
Diversification Opportunities for MeVis Medical and Penn National
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MeVis and Penn is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and Penn National Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penn National Gaming 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 Penn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penn National Gaming has no effect on the direction of MeVis Medical i.e., MeVis Medical and Penn National go up and down completely randomly.
Pair Corralation between MeVis Medical and Penn National
Assuming the 90 days trading horizon MeVis Medical Solutions is expected to generate 0.39 times more return on investment than Penn National. However, MeVis Medical Solutions is 2.56 times less risky than Penn National. It trades about 0.12 of its potential returns per unit of risk. Penn National Gaming is currently generating about -0.04 per unit of risk. If you would invest 2,389 in MeVis Medical Solutions on December 28, 2024 and sell it today you would earn a total of 211.00 from holding MeVis Medical Solutions or generate 8.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MeVis Medical Solutions vs. Penn National Gaming
Performance |
Timeline |
MeVis Medical Solutions |
Penn National Gaming |
MeVis Medical and Penn National Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MeVis Medical and Penn National
The main advantage of trading using opposite MeVis Medical and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical position performs unexpectedly, Penn National 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 Penn National will offset losses from the drop in Penn National's long position.MeVis Medical vs. AcadeMedia AB | MeVis Medical vs. Sims Metal Management | MeVis Medical vs. Q2M Managementberatung AG | MeVis Medical vs. Prosiebensat 1 Media |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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