Correlation Between MedCap AB and Bonesupport Holding

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

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

Diversification Opportunities for MedCap AB and Bonesupport Holding

0.28

Correlation Coefficient

MedCap AB  Bonesupport Holding

Modest diversification

The 3 months correlation between MedCap and Bonesupport is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding MedCap AB and Bonesupport Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonesupport Holding and MedCap AB 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 MedCap AB are associated (or correlated) with Bonesupport Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonesupport Holding has no effect on the direction of MedCap AB i.e., MedCap AB and Bonesupport Holding go up and down completely randomly.

Pair Corralation between MedCap AB and Bonesupport Holding

Assuming the 90 days trading horizon MedCap AB is expected to generate 0.7 times more return on investment than Bonesupport Holding. However, MedCap AB is 1.44 times less risky than Bonesupport Holding. It trades about 0.22 of its potential returns per unit of risk. Bonesupport Holding AB is currently generating about 0.03 per unit of risk. If you would invest  40,500  in MedCap AB on April 24, 2025 and sell it today you would earn a total of  11,900  from holding MedCap AB or generate 29.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

MedCap AB  vs.  Bonesupport Holding AB

MedCap AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MedCap AB are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MedCap AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Bonesupport Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bonesupport Holding AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bonesupport Holding is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MedCap AB and Bonesupport Holding

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

The idea behind MedCap AB and Bonesupport Holding AB 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.