Correlation Between Vibhavadi Medical and MBK Public

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

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

Diversification Opportunities for Vibhavadi Medical and MBK Public

-0.42

Correlation Coefficient

Vibhavadi Medical  MBK Public

Very good diversification

The 3 months correlation between Vibhavadi and MBK is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Vibhavadi Medical Center and MBK Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBK Public and Vibhavadi 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 Vibhavadi Medical Center are associated (or correlated) with MBK Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBK Public has no effect on the direction of Vibhavadi Medical i.e., Vibhavadi Medical and MBK Public go up and down completely randomly.

Pair Corralation between Vibhavadi Medical and MBK Public

Assuming the 90 days trading horizon Vibhavadi Medical Center is expected to generate 24.9 times more return on investment than MBK Public. However, Vibhavadi Medical is 24.9 times more volatile than MBK Public. It trades about 0.04 of its potential returns per unit of risk. MBK Public is currently generating about 0.04 per unit of risk. If you would invest  253.00  in Vibhavadi Medical Center on September 13, 2024 and sell it today you would lose (41.00) from holding Vibhavadi Medical Center or give up 16.21% of portfolio value over 90 days.

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

Vibhavadi Medical Center  vs.  MBK Public

Vibhavadi Medical Center

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vibhavadi Medical Center has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Vibhavadi Medical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

MBK Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MBK Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, MBK Public may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Vibhavadi Medical and MBK Public

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

The idea behind Vibhavadi Medical Center and MBK Public 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.