Correlation Between MEDIPOST and Next Bt
Can any of the company-specific risk be diversified away by investing in both MEDIPOST and Next Bt 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 MEDIPOST and Next Bt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDIPOST Co and Next Bt Co, you can compare the effects of market volatilities on MEDIPOST and Next Bt 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 MEDIPOST with a short position of Next Bt. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDIPOST and Next Bt.
Diversification Opportunities for MEDIPOST and Next Bt
Pay attention - limited upside
The 3 months correlation between MEDIPOST and Next is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding MEDIPOST Co and Next Bt Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Bt and MEDIPOST 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 MEDIPOST Co are associated (or correlated) with Next Bt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Bt has no effect on the direction of MEDIPOST i.e., MEDIPOST and Next Bt go up and down completely randomly.
Pair Corralation between MEDIPOST and Next Bt
Assuming the 90 days trading horizon MEDIPOST Co is expected to generate 0.75 times more return on investment than Next Bt. However, MEDIPOST Co is 1.33 times less risky than Next Bt. It trades about 0.01 of its potential returns per unit of risk. Next Bt Co is currently generating about -0.02 per unit of risk. If you would invest 1,349,351 in MEDIPOST Co on September 26, 2024 and sell it today you would lose (183,351) from holding MEDIPOST Co or give up 13.59% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.34% |
Values | Daily Returns |
MEDIPOST Co vs. Next Bt Co
Performance |
Timeline |
MEDIPOST |
Next Bt |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MEDIPOST and Next Bt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MEDIPOST and Next Bt
The main advantage of trading using opposite MEDIPOST and Next Bt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDIPOST position performs unexpectedly, Next Bt 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 Next Bt will offset losses from the drop in Next Bt's long position.The idea behind MEDIPOST Co and Next Bt Co 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.Next Bt vs. Youngsin Metal Industrial | Next Bt vs. Infinitt Healthcare Co | Next Bt vs. Samsung Life Insurance | Next Bt vs. Aprogen Healthcare Games |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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