Correlation Between MediPress Health and Orbit Technologies

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

By analyzing existing cross correlation between MediPress Health Limited Partnership and Orbit Technologies, you can compare the effects of market volatilities on MediPress Health and Orbit Technologies 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 MediPress Health with a short position of Orbit Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediPress Health and Orbit Technologies.

Diversification Opportunities for MediPress Health and Orbit Technologies

0.25

Correlation Coefficient

MediPress Health  Orbit Technologies

Modest diversification

The 3 months correlation between MediPress and Orbit is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding MediPress Health Limited Partn and Orbit Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Technologies and MediPress Health 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 MediPress Health Limited Partnership are associated (or correlated) with Orbit Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Technologies has no effect on the direction of MediPress Health i.e., MediPress Health and Orbit Technologies go up and down completely randomly.

Pair Corralation between MediPress Health and Orbit Technologies

Assuming the 90 days trading horizon MediPress Health is expected to generate 3.69 times less return on investment than Orbit Technologies. In addition to that, MediPress Health is 1.11 times more volatile than Orbit Technologies. It trades about 0.09 of its total potential returns per unit of risk. Orbit Technologies is currently generating about 0.37 per unit of volatility. If you would invest  226,000  in Orbit Technologies on September 17, 2024 and sell it today you would earn a total of  84,000  from holding Orbit Technologies or generate 37.17% return on investment over 90 days.

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

MediPress Health Limited Partn  vs.  Orbit Technologies

MediPress Health Lim

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MediPress Health Limited Partnership are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MediPress Health may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Orbit Technologies

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Technologies are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Orbit Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MediPress Health and Orbit Technologies

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

The idea behind MediPress Health Limited Partnership and Orbit Technologies 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.