Correlation Between VFD GROUP and INDUSTRIAL MEDICAL

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

By analyzing existing cross correlation between VFD GROUP and INDUSTRIAL MEDICAL GASES, you can compare the effects of market volatilities on VFD GROUP and INDUSTRIAL MEDICAL 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 VFD GROUP with a short position of INDUSTRIAL MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of VFD GROUP and INDUSTRIAL MEDICAL.

Diversification Opportunities for VFD GROUP and INDUSTRIAL MEDICAL

-0.78

Correlation Coefficient

VFD GROUP  INDUSTRIAL MEDICAL

Pay attention - limited upside

The 3 months correlation between VFD and INDUSTRIAL is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding VFD GROUP and INDUSTRIAL MEDICAL GASES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDUSTRIAL MEDICAL GASES and VFD GROUP 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 VFD GROUP are associated (or correlated) with INDUSTRIAL MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDUSTRIAL MEDICAL GASES has no effect on the direction of VFD GROUP i.e., VFD GROUP and INDUSTRIAL MEDICAL go up and down completely randomly.

Pair Corralation between VFD GROUP and INDUSTRIAL MEDICAL

Assuming the 90 days trading horizon VFD GROUP is expected to under-perform the INDUSTRIAL MEDICAL. In addition to that, VFD GROUP is 1.68 times more volatile than INDUSTRIAL MEDICAL GASES. It trades about 0.0 of its total potential returns per unit of risk. INDUSTRIAL MEDICAL GASES is currently generating about 0.13 per unit of volatility. If you would invest  3,500  in INDUSTRIAL MEDICAL GASES on September 12, 2024 and sell it today you would earn a total of  295.00  from holding INDUSTRIAL MEDICAL GASES or generate 8.43% return on investment over 90 days.

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

VFD GROUP  vs.  INDUSTRIAL MEDICAL GASES

VFD GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

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

INDUSTRIAL MEDICAL GASES

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INDUSTRIAL MEDICAL GASES are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, INDUSTRIAL MEDICAL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VFD GROUP and INDUSTRIAL MEDICAL

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

The idea behind VFD GROUP and INDUSTRIAL MEDICAL GASES 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.