Correlation Between MediPress Health and Nice

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

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

Diversification Opportunities for MediPress Health and Nice

0.66

Correlation Coefficient

MediPress Health  Nice

Poor diversification

The 3 months correlation between MediPress and Nice is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding MediPress Health Limited Partn and Nice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice and MediPress 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 MediPress Health Limited Partnership are associated (or correlated) with Nice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice has no effect on the direction of MediPress Health i.e., MediPress Health and Nice go up and down completely randomly.

Pair Corralation between MediPress Health and Nice

Assuming the 90 days trading horizon MediPress Health Limited Partnership is expected to under-perform the Nice. But the stock apears to be less risky and, when comparing its historical volatility, MediPress Health Limited Partnership is 1.24 times less risky than Nice. The stock trades about -0.05 of its potential returns per unit of risk. The Nice is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  6,206,000  in Nice on December 30, 2024 and sell it today you would lose (275,000) from holding Nice or give up 4.43% of portfolio value over 90 days.

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

MediPress Health Limited Partn  vs.  Nice

MediPress Health Lim

Risk-Adjusted Performance

Very Weak

Over the last 90 days MediPress Health Limited Partnership has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Nice

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nice has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nice is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MediPress Health and Nice

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

The idea behind MediPress Health Limited Partnership and Nice 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.