Correlation Between Nasdaq and Medacta Group

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

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

Diversification Opportunities for Nasdaq and Medacta Group

-0.89

Correlation Coefficient

Nasdaq  Medacta Group

Pay attention - limited upside

The 3 months correlation between Nasdaq and Medacta is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Medacta Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medacta Group SA and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Medacta Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medacta Group SA has no effect on the direction of Nasdaq i.e., Nasdaq and Medacta Group go up and down completely randomly.

Pair Corralation between Nasdaq and Medacta Group

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.58 times more return on investment than Medacta Group. However, Nasdaq Inc is 1.72 times less risky than Medacta Group. It trades about 0.16 of its potential returns per unit of risk. Medacta Group SA is currently generating about -0.09 per unit of risk. If you would invest  7,249  in Nasdaq Inc on September 17, 2024 and sell it today you would earn a total of  763.00  from holding Nasdaq Inc or generate 10.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Nasdaq Inc  vs.  Medacta Group SA

Nasdaq Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Medacta Group SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medacta Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Nasdaq and Medacta Group

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

The idea behind Nasdaq Inc and Medacta Group SA 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.