Correlation Between Medicure and Benchmark Botanics

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

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

Diversification Opportunities for Medicure and Benchmark Botanics

0.0

Correlation Coefficient

Medicure  Benchmark Botanics

Pay attention - limited upside

The 3 months correlation between Medicure and Benchmark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Medicure and Benchmark Botanics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benchmark Botanics and Medicure 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 Medicure are associated (or correlated) with Benchmark Botanics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benchmark Botanics has no effect on the direction of Medicure i.e., Medicure and Benchmark Botanics go up and down completely randomly.

Pair Corralation between Medicure and Benchmark Botanics

If you would invest  70.00  in Medicure on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Medicure or generate 0.0% return on investment over 90 days.

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

Medicure  vs.  Benchmark Botanics

Medicure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medicure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward-looking indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Benchmark Botanics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Benchmark Botanics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Benchmark Botanics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Medicure and Benchmark Botanics

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

The idea behind Medicure and Benchmark Botanics 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.