Correlation Between Medplus Health and Hilton Metal

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

By analyzing existing cross correlation between Medplus Health Services and Hilton Metal Forging, you can compare the effects of market volatilities on Medplus Health and Hilton Metal 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 Medplus Health with a short position of Hilton Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medplus Health and Hilton Metal.

Diversification Opportunities for Medplus Health and Hilton Metal

-0.09

Correlation Coefficient

Medplus Health  Hilton Metal

Good diversification

The 3 months correlation between Medplus and Hilton is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Medplus Health Services and Hilton Metal Forging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Metal Forging and Medplus Health 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 Medplus Health Services are associated (or correlated) with Hilton Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Metal Forging has no effect on the direction of Medplus Health i.e., Medplus Health and Hilton Metal go up and down completely randomly.

Pair Corralation between Medplus Health and Hilton Metal

Assuming the 90 days trading horizon Medplus Health Services is expected to generate 0.66 times more return on investment than Hilton Metal. However, Medplus Health Services is 1.51 times less risky than Hilton Metal. It trades about 0.12 of its potential returns per unit of risk. Hilton Metal Forging is currently generating about -0.04 per unit of risk. If you would invest  69,875  in Medplus Health Services on September 3, 2024 and sell it today you would earn a total of  8,395  from holding Medplus Health Services or generate 12.01% return on investment over 90 days.

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

Medplus Health Services  vs.  Hilton Metal Forging

Medplus Health Services

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Medplus Health Services are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Medplus Health may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hilton Metal Forging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hilton Metal Forging has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Medplus Health and Hilton Metal

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

The idea behind Medplus Health Services and Hilton Metal Forging 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..