Correlation Between MPLN Old and Baxter International
Can any of the company-specific risk be diversified away by investing in both MPLN Old and Baxter International 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 MPLN Old and Baxter International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MPLN Old and Baxter International, you can compare the effects of market volatilities on MPLN Old and Baxter International 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 MPLN Old with a short position of Baxter International. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPLN Old and Baxter International.
Diversification Opportunities for MPLN Old and Baxter International
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MPLN and Baxter is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding MPLN Old and Baxter International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baxter International and MPLN Old 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 MPLN Old are associated (or correlated) with Baxter International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baxter International has no effect on the direction of MPLN Old i.e., MPLN Old and Baxter International go up and down completely randomly.
Pair Corralation between MPLN Old and Baxter International
Given the investment horizon of 90 days MPLN Old is expected to generate 4.55 times more return on investment than Baxter International. However, MPLN Old is 4.55 times more volatile than Baxter International. It trades about 0.16 of its potential returns per unit of risk. Baxter International is currently generating about 0.16 per unit of risk. If you would invest 1,546 in MPLN Old on December 29, 2024 and sell it today you would earn a total of 769.00 from holding MPLN Old or generate 49.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 67.21% |
Values | Daily Returns |
MPLN Old vs. Baxter International
Performance |
Timeline |
MPLN Old |
Risk-Adjusted Performance
Good
Weak | Strong |
Baxter International |
MPLN Old and Baxter International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MPLN Old and Baxter International
The main advantage of trading using opposite MPLN Old and Baxter International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPLN Old position performs unexpectedly, Baxter International 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 Baxter International will offset losses from the drop in Baxter International's long position.MPLN Old vs. FOXO Technologies | MPLN Old vs. Heartbeam | MPLN Old vs. EUDA Health Holdings | MPLN Old vs. Nutex Health |
Baxter International vs. Beyond Air | Baxter International vs. PAVmed Series Z | Baxter International vs. Clearpoint Neuro | Baxter International vs. LivaNova PLC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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