Correlation Between Mednax and Lucid Diagnostics

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

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

Diversification Opportunities for Mednax and Lucid Diagnostics

0.48

Correlation Coefficient

Mednax  Lucid Diagnostics

Very weak diversification

The 3 months correlation between Mednax and Lucid is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mednax Inc and Lucid Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Diagnostics and Mednax 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 Mednax Inc are associated (or correlated) with Lucid Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Diagnostics has no effect on the direction of Mednax i.e., Mednax and Lucid Diagnostics go up and down completely randomly.

Pair Corralation between Mednax and Lucid Diagnostics

Allowing for the 90-day total investment horizon Mednax Inc is expected to generate 1.11 times more return on investment than Lucid Diagnostics. However, Mednax is 1.11 times more volatile than Lucid Diagnostics. It trades about 0.05 of its potential returns per unit of risk. Lucid Diagnostics is currently generating about 0.02 per unit of risk. If you would invest  1,273  in Mednax Inc on October 20, 2024 and sell it today you would earn a total of  111.00  from holding Mednax Inc or generate 8.72% return on investment over 90 days.

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

Mednax Inc  vs.  Lucid Diagnostics

Mednax Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mednax Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, Mednax may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Lucid Diagnostics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lucid Diagnostics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Lucid Diagnostics is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Mednax and Lucid Diagnostics

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

The idea behind Mednax Inc and Lucid Diagnostics 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.