Correlation Between CVECN and MEDIFAST INC

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

By analyzing existing cross correlation between CVECN 265 15 JAN 32 and MEDIFAST INC, you can compare the effects of market volatilities on CVECN and MEDIFAST INC 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 CVECN with a short position of MEDIFAST INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVECN and MEDIFAST INC.

Diversification Opportunities for CVECN and MEDIFAST INC

0.19

Correlation Coefficient

CVECN  MEDIFAST INC

Average diversification

The 3 months correlation between CVECN and MEDIFAST is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CVECN 265 15 JAN 32 and MEDIFAST INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIFAST INC and CVECN 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 CVECN 265 15 JAN 32 are associated (or correlated) with MEDIFAST INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIFAST INC has no effect on the direction of CVECN i.e., CVECN and MEDIFAST INC go up and down completely randomly.

Pair Corralation between CVECN and MEDIFAST INC

Assuming the 90 days trading horizon CVECN 265 15 JAN 32 is expected to under-perform the MEDIFAST INC. But the bond apears to be less risky and, when comparing its historical volatility, CVECN 265 15 JAN 32 is 3.32 times less risky than MEDIFAST INC. The bond trades about -0.15 of its potential returns per unit of risk. The MEDIFAST INC is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,800  in MEDIFAST INC on October 10, 2024 and sell it today you would lose (158.00) from holding MEDIFAST INC or give up 8.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	73.77%
Values	Daily Returns

CVECN 265 15 JAN 32  vs.  MEDIFAST INC

CVECN 265 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CVECN 265 15 JAN 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CVECN 265 15 JAN 32 investors.

MEDIFAST INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDIFAST INC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with CVECN and MEDIFAST INC

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

The idea behind CVECN 265 15 JAN 32 and MEDIFAST INC 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.