Correlation Between SGC ETEC and CU Medical
Can any of the company-specific risk be diversified away by investing in both SGC ETEC and CU Medical 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 SGC ETEC and CU Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SGC eTEC EC and CU Medical Systems, you can compare the effects of market volatilities on SGC ETEC and CU Medical 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 SGC ETEC with a short position of CU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SGC ETEC and CU Medical.
Diversification Opportunities for SGC ETEC and CU Medical
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SGC and 115480 is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SGC eTEC EC and CU Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CU Medical Systems and SGC ETEC 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 SGC eTEC EC are associated (or correlated) with CU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CU Medical Systems has no effect on the direction of SGC ETEC i.e., SGC ETEC and CU Medical go up and down completely randomly.
Pair Corralation between SGC ETEC and CU Medical
Assuming the 90 days trading horizon SGC eTEC EC is expected to under-perform the CU Medical. But the stock apears to be less risky and, when comparing its historical volatility, SGC eTEC EC is 1.14 times less risky than CU Medical. The stock trades about -0.1 of its potential returns per unit of risk. The CU Medical Systems is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 135,500 in CU Medical Systems on September 12, 2024 and sell it today you would lose (72,400) from holding CU Medical Systems or give up 53.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
SGC eTEC EC vs. CU Medical Systems
Performance |
| Timeline |
| SGC eTEC EC |
| CU Medical Systems |
SGC ETEC and CU Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SGC ETEC and CU Medical
The main advantage of trading using opposite SGC ETEC and CU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SGC ETEC position performs unexpectedly, CU Medical 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 CU Medical will offset losses from the drop in CU Medical's long position.| SGC ETEC vs. Korea New Network | SGC ETEC vs. Solution Advanced Technology | SGC ETEC vs. Busan Industrial Co | SGC ETEC vs. Busan Ind |
| CU Medical vs. Koh Young Technology | CU Medical vs. Hana Technology Co | CU Medical vs. Global Standard Technology | CU Medical vs. CKH Food Health |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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