Correlation Between Medplus Health and Indian Card

Can any of the company-specific risk be diversified away by investing in both Medplus Health and Indian Card 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 Indian Card 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 Indian Card Clothing, you can compare the effects of market volatilities on Medplus Health and Indian Card 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 Indian Card. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medplus Health and Indian Card.

Diversification Opportunities for Medplus Health and Indian Card

0.67

Correlation Coefficient

Medplus Health  Indian Card

Poor diversification

The 3 months correlation between Medplus and Indian is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Medplus Health Services and Indian Card Clothing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Card Clothing 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 Indian Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Card Clothing has no effect on the direction of Medplus Health i.e., Medplus Health and Indian Card go up and down completely randomly.

Pair Corralation between Medplus Health and Indian Card

Assuming the 90 days trading horizon Medplus Health Services is expected to generate 0.75 times more return on investment than Indian Card. However, Medplus Health Services is 1.34 times less risky than Indian Card. It trades about -0.3 of its potential returns per unit of risk. Indian Card Clothing is currently generating about -0.55 per unit of risk. If you would invest  77,420  in Medplus Health Services on December 10, 2024 and sell it today you would lose (7,350) from holding Medplus Health Services or give up 9.49% of portfolio value over 90 days.

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

Medplus Health Services  vs.  Indian Card Clothing

Medplus Health Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Medplus Health Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Indian Card Clothing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indian Card Clothing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Medplus Health and Indian Card

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

The idea behind Medplus Health Services and Indian Card Clothing 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.