Correlation Between MeVis Medical and ACCOR SPADR

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

By analyzing existing cross correlation between MeVis Medical Solutions and ACCOR SPADR NEW, you can compare the effects of market volatilities on MeVis Medical and ACCOR SPADR 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 MeVis Medical with a short position of ACCOR SPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and ACCOR SPADR.

Diversification Opportunities for MeVis Medical and ACCOR SPADR

0.71

Correlation Coefficient

MeVis Medical  ACCOR SPADR

Poor diversification

The 3 months correlation between MeVis and ACCOR is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and ACCOR SPADR NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACCOR SPADR NEW and MeVis 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 MeVis Medical Solutions are associated (or correlated) with ACCOR SPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACCOR SPADR NEW has no effect on the direction of MeVis Medical i.e., MeVis Medical and ACCOR SPADR go up and down completely randomly.

Pair Corralation between MeVis Medical and ACCOR SPADR

Assuming the 90 days trading horizon MeVis Medical is expected to generate 3.16 times less return on investment than ACCOR SPADR. But when comparing it to its historical volatility, MeVis Medical Solutions is 1.79 times less risky than ACCOR SPADR. It trades about 0.09 of its potential returns per unit of risk. ACCOR SPADR NEW is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  745.00  in ACCOR SPADR NEW on September 4, 2024 and sell it today you would earn a total of  110.00  from holding ACCOR SPADR NEW or generate 14.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

MeVis Medical Solutions  vs.  ACCOR SPADR NEW

MeVis Medical Solutions

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MeVis Medical Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MeVis Medical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

ACCOR SPADR NEW

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ACCOR SPADR NEW are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ACCOR SPADR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MeVis Medical and ACCOR SPADR

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

The idea behind MeVis Medical Solutions and ACCOR SPADR 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.