Correlation Between Medincell and BIO UV

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

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

Diversification Opportunities for Medincell and BIO UV

-0.64

Correlation Coefficient

Medincell  BIO UV

Excellent diversification

The 3 months correlation between Medincell and BIO is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Medincell SA and BIO UV Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIO UV Group and Medincell 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 Medincell SA are associated (or correlated) with BIO UV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIO UV Group has no effect on the direction of Medincell i.e., Medincell and BIO UV go up and down completely randomly.

Pair Corralation between Medincell and BIO UV

Assuming the 90 days trading horizon Medincell is expected to generate 1.06 times less return on investment than BIO UV. But when comparing it to its historical volatility, Medincell SA is 1.01 times less risky than BIO UV. It trades about 0.05 of its potential returns per unit of risk. BIO UV Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  198.00  in BIO UV Group on September 28, 2024 and sell it today you would earn a total of  15.00  from holding BIO UV Group or generate 7.58% return on investment over 90 days.

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

Medincell SA  vs.  BIO UV Group

Medincell SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Medincell SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Medincell may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BIO UV Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BIO UV Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, BIO UV may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Medincell and BIO UV

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

The idea behind Medincell SA and BIO UV Group 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.