Correlation Between NYSE Composite and Medicure
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Medicure 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 NYSE Composite and Medicure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Medicure, you can compare the effects of market volatilities on NYSE Composite and Medicure 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 NYSE Composite with a short position of Medicure. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Medicure.
Diversification Opportunities for NYSE Composite and Medicure
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Medicure is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Medicure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicure and NYSE Composite 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 NYSE Composite are associated (or correlated) with Medicure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicure has no effect on the direction of NYSE Composite i.e., NYSE Composite and Medicure go up and down completely randomly.
Pair Corralation between NYSE Composite and Medicure
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.17 times more return on investment than Medicure. However, NYSE Composite is 5.82 times less risky than Medicure. It trades about 0.12 of its potential returns per unit of risk. Medicure is currently generating about -0.04 per unit of risk. If you would invest 1,523,518 in NYSE Composite on December 3, 2024 and sell it today you would earn a total of 458,830 from holding NYSE Composite or generate 30.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Medicure
Performance |
Timeline |
NYSE Composite and Medicure Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Medicure
Pair trading matchups for Medicure
Pair Trading with NYSE Composite and Medicure
The main advantage of trading using opposite NYSE Composite and Medicure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Medicure 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 Medicure will offset losses from the drop in Medicure's long position.NYSE Composite vs. Inflection Point Acquisition | NYSE Composite vs. Cardinal Health | NYSE Composite vs. Futuretech II Acquisition | NYSE Composite vs. Black Spade Acquisition |
Medicure vs. Covalon Technologies | Medicure vs. Pacific Health Care | Medicure vs. Vext Science | Medicure vs. Pharma Bio Serv |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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