Correlation Between Oeneo SA and Mediantechn

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

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

Diversification Opportunities for Oeneo SA and Mediantechn

0.7

Correlation Coefficient

Oeneo SA  Mediantechn

Poor diversification

The 3 months correlation between Oeneo and Mediantechn is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Oeneo SA and Mediantechn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediantechn and Oeneo SA 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 Oeneo SA are associated (or correlated) with Mediantechn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediantechn has no effect on the direction of Oeneo SA i.e., Oeneo SA and Mediantechn go up and down completely randomly.

Pair Corralation between Oeneo SA and Mediantechn

Assuming the 90 days trading horizon Oeneo SA is expected to generate 0.26 times more return on investment than Mediantechn. However, Oeneo SA is 3.9 times less risky than Mediantechn. It trades about -0.1 of its potential returns per unit of risk. Mediantechn is currently generating about -0.05 per unit of risk. If you would invest  1,115  in Oeneo SA on January 29, 2024 and sell it today you would lose (95.00) from holding Oeneo SA or give up 8.52% of portfolio value over 90 days.

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

Oeneo SA  vs.  Mediantechn

Oeneo SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oeneo SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Mediantechn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mediantechn has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Oeneo SA and Mediantechn

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

The idea behind Oeneo SA and Mediantechn 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.