Correlation Between Cengild Medical and Mr D

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

By analyzing existing cross correlation between Cengild Medical Berhad and Mr D I, you can compare the effects of market volatilities on Cengild Medical and Mr D 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 Cengild Medical with a short position of Mr D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cengild Medical and Mr D.

Diversification Opportunities for Cengild Medical and Mr D

-0.58

Correlation Coefficient

Cengild Medical  Mr D

Excellent diversification

The 3 months correlation between Cengild and 5296 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cengild Medical Berhad and Mr D I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr D I and Cengild Medical 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 Cengild Medical Berhad are associated (or correlated) with Mr D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr D I has no effect on the direction of Cengild Medical i.e., Cengild Medical and Mr D go up and down completely randomly.

Pair Corralation between Cengild Medical and Mr D

Assuming the 90 days trading horizon Cengild Medical Berhad is expected to under-perform the Mr D. In addition to that, Cengild Medical is 1.23 times more volatile than Mr D I. It trades about -0.02 of its total potential returns per unit of risk. Mr D I is currently generating about 0.04 per unit of volatility. If you would invest  145.00  in Mr D I on September 30, 2024 and sell it today you would earn a total of  39.00  from holding Mr D I or generate 26.9% return on investment over 90 days.

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

Cengild Medical Berhad  vs.  Mr D I

Cengild Medical Berhad

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cengild Medical Berhad are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Cengild Medical is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Mr D I

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mr D I has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Cengild Medical and Mr D

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

The idea behind Cengild Medical Berhad and Mr D I 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.