Correlation Between Mednax and Si Bone

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

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

Diversification Opportunities for Mednax and Si Bone

0.22

Correlation Coefficient

Mednax  Si Bone

Modest diversification

The 3 months correlation between Mednax and SIBN is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mednax Inc and Si Bone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Si Bone 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 Si Bone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Si Bone has no effect on the direction of Mednax i.e., Mednax and Si Bone go up and down completely randomly.

Pair Corralation between Mednax and Si Bone

Allowing for the 90-day total investment horizon Mednax is expected to generate 15.86 times less return on investment than Si Bone. In addition to that, Mednax is 1.01 times more volatile than Si Bone. It trades about 0.01 of its total potential returns per unit of risk. Si Bone is currently generating about 0.16 per unit of volatility. If you would invest  1,337  in Si Bone on December 1, 2024 and sell it today you would earn a total of  475.00  from holding Si Bone or generate 35.53% return on investment over 90 days.

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

Mednax Inc  vs.  Si Bone

Mednax Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mednax Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Mednax is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Si Bone

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Si Bone are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, Si Bone displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mednax and Si Bone

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

The idea behind Mednax Inc and Si Bone 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.