Correlation Between MEDIFAST INC and BHCCN

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

By analyzing existing cross correlation between MEDIFAST INC and BHCCN 11 30 SEP 28, you can compare the effects of market volatilities on MEDIFAST INC and BHCCN 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 MEDIFAST INC with a short position of BHCCN. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDIFAST INC and BHCCN.

Diversification Opportunities for MEDIFAST INC and BHCCN

0.39

Correlation Coefficient

MEDIFAST INC  BHCCN

Weak diversification

The 3 months correlation between MEDIFAST and BHCCN is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding MEDIFAST INC and BHCCN 11 30 SEP 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHCCN 11 30 and MEDIFAST INC 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 MEDIFAST INC are associated (or correlated) with BHCCN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHCCN 11 30 has no effect on the direction of MEDIFAST INC i.e., MEDIFAST INC and BHCCN go up and down completely randomly.

Pair Corralation between MEDIFAST INC and BHCCN

Considering the 90-day investment horizon MEDIFAST INC is expected to generate 0.58 times more return on investment than BHCCN. However, MEDIFAST INC is 1.71 times less risky than BHCCN. It trades about -0.4 of its potential returns per unit of risk. BHCCN 11 30 SEP 28 is currently generating about -0.28 per unit of risk. If you would invest  2,099  in MEDIFAST INC on October 10, 2024 and sell it today you would lose (457.00) from holding MEDIFAST INC or give up 21.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	85.0%
Values	Daily Returns

MEDIFAST INC  vs.  BHCCN 11 30 SEP 28

MEDIFAST INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDIFAST INC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

BHCCN 11 30

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BHCCN 11 30 SEP 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for BHCCN 11 30 SEP 28 investors.

Pair Trading with MEDIFAST INC and BHCCN

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

The idea behind MEDIFAST INC and BHCCN 11 30 SEP 28 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..