Correlation Between MGC Pharmaceuticals and Filament Health

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

By analyzing existing cross correlation between MGC Pharmaceuticals and Filament Health Corp, you can compare the effects of market volatilities on MGC Pharmaceuticals and Filament Health 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 MGC Pharmaceuticals with a short position of Filament Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGC Pharmaceuticals and Filament Health.

Diversification Opportunities for MGC Pharmaceuticals and Filament Health

0.0

Correlation Coefficient

MGC Pharmaceuticals  Filament Health

Pay attention - limited upside

The 3 months correlation between MGC and Filament is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MGC Pharmaceuticals and Filament Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filament Health Corp and MGC Pharmaceuticals 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 MGC Pharmaceuticals are associated (or correlated) with Filament Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filament Health Corp has no effect on the direction of MGC Pharmaceuticals i.e., MGC Pharmaceuticals and Filament Health go up and down completely randomly.

Pair Corralation between MGC Pharmaceuticals and Filament Health

If you would invest  3.98  in Filament Health Corp on December 28, 2024 and sell it today you would lose (1.85) from holding Filament Health Corp or give up 46.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

MGC Pharmaceuticals  vs.  Filament Health Corp

MGC Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days MGC Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, MGC Pharmaceuticals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Filament Health Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Filament Health Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Filament Health reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MGC Pharmaceuticals and Filament Health

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

The idea behind MGC Pharmaceuticals and Filament Health Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.