Correlation Between Medpace Holdings and Prothena Plc
Can any of the company-specific risk be diversified away by investing in both Medpace Holdings and Prothena Plc 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 Medpace Holdings and Prothena Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medpace Holdings and Prothena plc, you can compare the effects of market volatilities on Medpace Holdings and Prothena Plc 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 Medpace Holdings with a short position of Prothena Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medpace Holdings and Prothena Plc.
Diversification Opportunities for Medpace Holdings and Prothena Plc
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Medpace and Prothena is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Medpace Holdings and Prothena plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prothena plc and Medpace Holdings 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 Medpace Holdings are associated (or correlated) with Prothena Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prothena plc has no effect on the direction of Medpace Holdings i.e., Medpace Holdings and Prothena Plc go up and down completely randomly.
Pair Corralation between Medpace Holdings and Prothena Plc
Given the investment horizon of 90 days Medpace Holdings is expected to generate 1.67 times less return on investment than Prothena Plc. But when comparing it to its historical volatility, Medpace Holdings is 1.41 times less risky than Prothena Plc. It trades about 0.1 of its potential returns per unit of risk. Prothena plc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 831.00 in Prothena plc on September 10, 2025 and sell it today you would earn a total of 201.00 from holding Prothena plc or generate 24.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medpace Holdings vs. Prothena plc
Performance |
| Timeline |
| Medpace Holdings |
| Prothena plc |
Medpace Holdings and Prothena Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medpace Holdings and Prothena Plc
The main advantage of trading using opposite Medpace Holdings and Prothena Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medpace Holdings position performs unexpectedly, Prothena Plc 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 Prothena Plc will offset losses from the drop in Prothena Plc's long position.| Medpace Holdings vs. Illumina | Medpace Holdings vs. ICON PLC | Medpace Holdings vs. Hologic | Medpace Holdings vs. Waters |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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