Correlation Between Medical Developments and Pengana Private

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

By analyzing existing cross correlation between Medical Developments International and Pengana Private Equity, you can compare the effects of market volatilities on Medical Developments and Pengana Private 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 Medical Developments with a short position of Pengana Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Developments and Pengana Private.

Diversification Opportunities for Medical Developments and Pengana Private

-0.16

Correlation Coefficient

Medical Developments  Pengana Private

Good diversification

The 3 months correlation between Medical and Pengana is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Medical Developments Internati and Pengana Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pengana Private Equity and Medical Developments 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 Medical Developments International are associated (or correlated) with Pengana Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pengana Private Equity has no effect on the direction of Medical Developments i.e., Medical Developments and Pengana Private go up and down completely randomly.

Pair Corralation between Medical Developments and Pengana Private

Assuming the 90 days trading horizon Medical Developments International is expected to generate 2.82 times more return on investment than Pengana Private. However, Medical Developments is 2.82 times more volatile than Pengana Private Equity. It trades about 0.12 of its potential returns per unit of risk. Pengana Private Equity is currently generating about 0.0 per unit of risk. If you would invest  40.00  in Medical Developments International on December 23, 2024 and sell it today you would earn a total of  22.00  from holding Medical Developments International or generate 55.0% return on investment over 90 days.

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

Medical Developments Internati  vs.  Pengana Private Equity

Medical Developments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Medical Developments International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Medical Developments unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pengana Private Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pengana Private Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pengana Private is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Medical Developments and Pengana Private

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

The idea behind Medical Developments International and Pengana Private Equity 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..