Correlation Between MEDIFAST INC and Regis Common

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

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

Diversification Opportunities for MEDIFAST INC and Regis Common

-0.36

Correlation Coefficient

MEDIFAST INC  Regis Common

Very good diversification

The 3 months correlation between MEDIFAST and Regis is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding MEDIFAST INC and Regis Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Common and MEDIFAST INC 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 MEDIFAST INC are associated (or correlated) with Regis Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regis Common has no effect on the direction of MEDIFAST INC i.e., MEDIFAST INC and Regis Common go up and down completely randomly.

Pair Corralation between MEDIFAST INC and Regis Common

Considering the 90-day investment horizon MEDIFAST INC is expected to generate 0.46 times more return on investment than Regis Common. However, MEDIFAST INC is 2.18 times less risky than Regis Common. It trades about -0.03 of its potential returns per unit of risk. Regis Common is currently generating about -0.05 per unit of risk. If you would invest  1,941  in MEDIFAST INC on August 19, 2024 and sell it today you would lose (127.00) from holding MEDIFAST INC or give up 6.54% of portfolio value over 90 days.

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

MEDIFAST INC  vs.  Regis Common

MEDIFAST INC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Regis Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regis Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with MEDIFAST INC and Regis Common

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

The idea behind MEDIFAST INC and Regis Common 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.