CORRELATION: Diversification in Finance and Investments

Posted on June 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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DEFINITION

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Correlation measures the relationship between two investments–the higher the correlation, the more likely they are to move in the same direction for a given set of economic or market events. Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient which has a value that must fall between -1.0 and +1.0.

So if two securities are highly positively correlated, they will move in the same direction the vast majority of the time. Negatively correlated investments do the opposite–as one security rises, the other falls, and vice versa. No correlation means there is no relationship between the movement of two securities–the performance of one security has no bearing on the performance of the other.

CAUSATION: https://medicalexecutivepost.com/2024/06/05/correlation-is-not-causation/

Correlation is an important concept for portfolio diversification--combining assets with low or negative correlations can improve risk-adjusted performance over time by providing a diversity of payouts under the same financial conditions.

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ADX: Average Directional Index

Posted on June 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters and AI

SPONSOR: http://www.MarcinkoAssociates.com

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The average directional movement index (ADX) was developed in 1978 by J. Welles Wilder as a technical indicator of trend strength in a series of prices of a financial instrument. ADX has become a widely used indicator for technical analysts, and is provided as a standard in collections of indicators offered by various trading platforms.

The ADX is a combination of two other indicators developed by Wilder, the positive directional indicator (abbreviated +DI) and negative directional indicator (-DI). The ADX combines them and smooths the result with a smoothed moving average.

The average directional index (ADX) is a technical indicator used by traders to determine the strength of a financial security’s price trend. It helps them reduce risk and increase profit potential by trading in the direction of a strong trend. Many traders consider the ADX to be the ultimate trend gauge because it is so reliable.

ADX quantifies trend strength by measuring the degree of directional movement in price. ADX calculations are based on a moving average of price range expansion or contraction over a given period. The default setting is 14 periods, although other settings can be used.

ADX can be used with any financial security, including stocks, exchange-traded funds, and futures.

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Stocks, Commodities and Bonds

Posted on June 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By AI

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  • Stocks: Israel and Iran exchanged missile strikes for a fourth day, but investors are betting that the conflict will remain at least somewhat contained. Reports that Iran wants to de-escalate the conflict and even restart nuclear talks seemed to underline that idea, and markets rose strongly throughout the afternoon.
  • Commodities: Gold fell as hopes of a ceasefire between Israel and Iran made investors more bullish, while Iranian oil infrastructure was spared from the attacks, pushing crude prices lower.
  • Bonds: A $13 billion 20-year bond auction this afternoon yielded strong demand, rounding out a series of solid auctions over the last few days that seemingly point to renewed investor confidence in US fixed income.

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DAILY UPDATE: Medicaid, HIV Vaccine, CDC and the Rising Stock Markets

Posted on June 17, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

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CITE: https://www.r2library.com/Resource

Stat: 2%. That’s the portion of Medicaid expansion enrollees who were either not working or in school due to “lack of interest” in finding a job. (Robert Wood Johnson Foundation)

Quote: “It’s just devastating. So much human toil has gone into this. Just when it looked like we could beat this virus, we’re going to give up.”—Dennis Burton, a Scripps Research Institute immunologist, on how a new HIV vaccine was about to start clinical trials before federal funding cuts (NPR)

Read: A look at HHS Secretary RFK Jr.’s new appointees to the CDC vaccine advisory panel. (Stat)

CITE: https://tinyurl.com/2h47urt5

🟢 What’s up

  • The wait is finally over: US Steel climbed 5.10% after President Trump signed an executive order approving its takeover by Nippon Steel.
  • Roku jumped 10.43% after announcing a partnership with Amazon that gives advertisers the ability to reach roughly 80% of American households with connected TVs.
  • Advanced Micro Devices rose 8.81% on an upgrade from Piper Sandler analysts, who think the semi stock’s AI business will boom.
  • EchoStar exploded 49.11% after Trump pushed the FCC to resolve its ongoing spectrum dispute with the satellite company.
  • Victoria’s Secret rose 2.36% on reports that the struggling retailer has attracted the attention of an activist investor.
  • Sage Therapeutics soared 35.37% on the news that it will be acquired by Supernus Pharmaceuticals in a $795 million deal.
  • MGM Resorts climbed 8.10% after the casino company revealed that its Bet MGM online gambling platform is expected to pull in more revenue than previously thought.
  • Kering, the parent company of Gucci, Yves Saint Laurent, and other luxury brands, popped 12.37% on the news that it has convinced Renault’s CEO to run the company.

What’s down

  • Sarepta Therapeutics plunged 42.12% after the pharma company reported a second death of a patient taking its Duchenne muscular dystrophy treatment Elevidys.
  • Reports that Iran wants to end hostilities pushed oil prices lower this afternoon, hurting shares of energy stocks like APA Corp (down 2.43%), Devon Energy (down 1.45%) and ConocoPhillips (down 2.02%).

CITE: https://tinyurl.com/tj8smmes

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

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