Correlation Between NRB Industrial and MEDI ASSIST

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

By analyzing existing cross correlation between NRB Industrial Bearings and MEDI ASSIST HEALTHCARE, you can compare the effects of market volatilities on NRB Industrial and MEDI ASSIST 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 NRB Industrial with a short position of MEDI ASSIST. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRB Industrial and MEDI ASSIST.

Diversification Opportunities for NRB Industrial and MEDI ASSIST

0.54

Correlation Coefficient

NRB Industrial  MEDI ASSIST

Very weak diversification

The 3 months correlation between NRB and MEDI is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NRB Industrial Bearings and MEDI ASSIST HEALTHCARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDI ASSIST HEALTHCARE and NRB Industrial 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 NRB Industrial Bearings are associated (or correlated) with MEDI ASSIST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDI ASSIST HEALTHCARE has no effect on the direction of NRB Industrial i.e., NRB Industrial and MEDI ASSIST go up and down completely randomly.

Pair Corralation between NRB Industrial and MEDI ASSIST

Assuming the 90 days trading horizon NRB Industrial Bearings is expected to generate 2.28 times more return on investment than MEDI ASSIST. However, NRB Industrial is 2.28 times more volatile than MEDI ASSIST HEALTHCARE. It trades about 0.08 of its potential returns per unit of risk. MEDI ASSIST HEALTHCARE is currently generating about 0.16 per unit of risk. If you would invest  2,217  in NRB Industrial Bearings on April 25, 2025 and sell it today you would earn a total of  448.00  from holding NRB Industrial Bearings or generate 20.21% return on investment over 90 days.

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

NRB Industrial Bearings  vs.  MEDI ASSIST HEALTHCARE

NRB Industrial Bearings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NRB Industrial Bearings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, NRB Industrial unveiled solid returns over the last few months and may actually be approaching a breakup point.

MEDI ASSIST HEALTHCARE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MEDI ASSIST HEALTHCARE are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady forward indicators, MEDI ASSIST unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NRB Industrial and MEDI ASSIST

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

The idea behind NRB Industrial Bearings and MEDI ASSIST HEALTHCARE 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..