Correlation Between Mednax and Stevanato Group

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

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

Diversification Opportunities for Mednax and Stevanato Group

-0.23

Correlation Coefficient

Mednax  Stevanato Group

Very good diversification

The 3 months correlation between Mednax and Stevanato is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mednax Inc and Stevanato Group SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stevanato Group SpA and Mednax 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 Mednax Inc are associated (or correlated) with Stevanato Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stevanato Group SpA has no effect on the direction of Mednax i.e., Mednax and Stevanato Group go up and down completely randomly.

Pair Corralation between Mednax and Stevanato Group

Allowing for the 90-day total investment horizon Mednax is expected to generate 2.94 times less return on investment than Stevanato Group. In addition to that, Mednax is 1.05 times more volatile than Stevanato Group SpA. It trades about 0.01 of its total potential returns per unit of risk. Stevanato Group SpA is currently generating about 0.02 per unit of volatility. If you would invest  2,165  in Stevanato Group SpA on January 14, 2025 and sell it today you would earn a total of  26.00  from holding Stevanato Group SpA or generate 1.2% return on investment over 90 days.

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

Mednax Inc  vs.  Stevanato Group SpA

Mednax Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mednax Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Mednax is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Stevanato Group SpA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stevanato Group SpA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Stevanato Group is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mednax and Stevanato Group

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

The idea behind Mednax Inc and Stevanato Group SpA 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..