Correlation Between SCANDMEDICAL SOLDK and MEDICAL FACILITIES

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

By analyzing existing cross correlation between SCANDMEDICAL SOLDK 040 and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on SCANDMEDICAL SOLDK and MEDICAL FACILITIES 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 SCANDMEDICAL SOLDK with a short position of MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANDMEDICAL SOLDK and MEDICAL FACILITIES.

Diversification Opportunities for SCANDMEDICAL SOLDK and MEDICAL FACILITIES

-0.35

Correlation Coefficient

SCANDMEDICAL SOLDK  MEDICAL FACILITIES

Very good diversification

The 3 months correlation between SCANDMEDICAL and MEDICAL is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SCANDMEDICAL SOLDK 040 and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW and SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK 040 are associated (or correlated) with MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of SCANDMEDICAL SOLDK i.e., SCANDMEDICAL SOLDK and MEDICAL FACILITIES go up and down completely randomly.

Pair Corralation between SCANDMEDICAL SOLDK and MEDICAL FACILITIES

Assuming the 90 days horizon SCANDMEDICAL SOLDK 040 is expected to under-perform the MEDICAL FACILITIES. In addition to that, SCANDMEDICAL SOLDK is 1.35 times more volatile than MEDICAL FACILITIES NEW. It trades about -0.07 of its total potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about 0.14 per unit of volatility. If you would invest  896.00  in MEDICAL FACILITIES NEW on September 22, 2024 and sell it today you would earn a total of  164.00  from holding MEDICAL FACILITIES NEW or generate 18.3% return on investment over 90 days.

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

SCANDMEDICAL SOLDK 040  vs.  MEDICAL FACILITIES NEW

SCANDMEDICAL SOLDK 040

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCANDMEDICAL SOLDK 040 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MEDICAL FACILITIES NEW

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with SCANDMEDICAL SOLDK and MEDICAL FACILITIES

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

The idea behind SCANDMEDICAL SOLDK 040 and MEDICAL FACILITIES NEW 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.