Correlation Between Movie Games and Medicalg

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

By analyzing existing cross correlation between Movie Games SA and Medicalg, you can compare the effects of market volatilities on Movie Games and Medicalg 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 Movie Games with a short position of Medicalg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Movie Games and Medicalg.

Diversification Opportunities for Movie Games and Medicalg

0.6

Correlation Coefficient

Movie Games  Medicalg

Poor diversification

The 3 months correlation between Movie and Medicalg is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Movie Games SA and Medicalg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicalg and Movie Games 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 Movie Games SA are associated (or correlated) with Medicalg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicalg has no effect on the direction of Movie Games i.e., Movie Games and Medicalg go up and down completely randomly.

Pair Corralation between Movie Games and Medicalg

Assuming the 90 days trading horizon Movie Games SA is expected to under-perform the Medicalg. But the stock apears to be less risky and, when comparing its historical volatility, Movie Games SA is 1.97 times less risky than Medicalg. The stock trades about -0.32 of its potential returns per unit of risk. The Medicalg is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  2,500  in Medicalg on September 3, 2024 and sell it today you would lose (560.00) from holding Medicalg or give up 22.4% of portfolio value over 90 days.

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

Movie Games SA  vs.  Medicalg

Movie Games SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Movie Games SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Medicalg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medicalg has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Movie Games and Medicalg

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

The idea behind Movie Games SA and Medicalg 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.