Correlation Between Mednax and Nexalin Technology

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

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

Diversification Opportunities for Mednax and Nexalin Technology

0.41

Correlation Coefficient

Mednax  Nexalin Technology

Very weak diversification

The 3 months correlation between Mednax and Nexalin is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Mednax Inc and Nexalin Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexalin Technology 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 Nexalin Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexalin Technology has no effect on the direction of Mednax i.e., Mednax and Nexalin Technology go up and down completely randomly.

Pair Corralation between Mednax and Nexalin Technology

Allowing for the 90-day total investment horizon Mednax Inc is expected to under-perform the Nexalin Technology. But the stock apears to be less risky and, when comparing its historical volatility, Mednax Inc is 13.45 times less risky than Nexalin Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Nexalin Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  54.00  in Nexalin Technology on October 25, 2024 and sell it today you would lose (30.00) from holding Nexalin Technology or give up 55.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	84.62%
Values	Daily Returns

Mednax Inc  vs.  Nexalin Technology

Mednax Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mednax Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Mednax exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nexalin Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nexalin Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, Nexalin Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mednax and Nexalin Technology

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

The idea behind Mednax Inc and Nexalin Technology 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.