Correlation Between Prairie Provident and Medovex Corp

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

By analyzing existing cross correlation between Prairie Provident Resources and Medovex Corp, you can compare the effects of market volatilities on Prairie Provident and Medovex Corp 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 Prairie Provident with a short position of Medovex Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prairie Provident and Medovex Corp.

Diversification Opportunities for Prairie Provident and Medovex Corp

0.0

Correlation Coefficient

Prairie Provident  Medovex Corp

Pay attention - limited upside

The 3 months correlation between Prairie and Medovex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Prairie Provident Resources and Medovex Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medovex Corp and Prairie Provident 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 Prairie Provident Resources are associated (or correlated) with Medovex Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medovex Corp has no effect on the direction of Prairie Provident i.e., Prairie Provident and Medovex Corp go up and down completely randomly.

Pair Corralation between Prairie Provident and Medovex Corp

If you would invest  1.06  in Prairie Provident Resources on December 30, 2024 and sell it today you would earn a total of  1.46  from holding Prairie Provident Resources or generate 137.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Prairie Provident Resources  vs.  Medovex Corp

Prairie Provident

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Prairie Provident Resources are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Prairie Provident reported solid returns over the last few months and may actually be approaching a breakup point.

Medovex Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Prairie Provident and Medovex Corp

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

The idea behind Prairie Provident Resources and Medovex Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.