Correlation Between Shaniv and MediPress Health

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

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

Diversification Opportunities for Shaniv and MediPress Health

0.51

Correlation Coefficient

Shaniv  MediPress Health

Very weak diversification

The 3 months correlation between Shaniv and MediPress is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Shaniv and MediPress Health Limited Partn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediPress Health Lim and Shaniv 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 Shaniv are associated (or correlated) with MediPress Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediPress Health Lim has no effect on the direction of Shaniv i.e., Shaniv and MediPress Health go up and down completely randomly.

Pair Corralation between Shaniv and MediPress Health

Assuming the 90 days trading horizon Shaniv is expected to generate 0.92 times more return on investment than MediPress Health. However, Shaniv is 1.09 times less risky than MediPress Health. It trades about 0.24 of its potential returns per unit of risk. MediPress Health Limited Partnership is currently generating about 0.12 per unit of risk. If you would invest  34,183  in Shaniv on September 29, 2024 and sell it today you would earn a total of  7,587  from holding Shaniv or generate 22.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.87%
Values	Daily Returns

Shaniv  vs.  MediPress Health Limited Partn

Shaniv

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shaniv are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shaniv sustained solid returns over the last few months and may actually be approaching a breakup point.

MediPress Health Lim

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MediPress Health Limited Partnership are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MediPress Health sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shaniv and MediPress Health

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

The idea behind Shaniv and MediPress Health Limited Partnership 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.