Correlation Between InBody CoLtd and CU Medical
Can any of the company-specific risk be diversified away by investing in both InBody CoLtd 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 InBody CoLtd and CU Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InBody CoLtd and CU Medical Systems, you can compare the effects of market volatilities on InBody CoLtd 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 InBody CoLtd with a short position of CU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of InBody CoLtd and CU Medical.
Diversification Opportunities for InBody CoLtd and CU Medical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InBody and 115480 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding InBody CoLtd 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 InBody CoLtd 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 InBody CoLtd 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 InBody CoLtd i.e., InBody CoLtd and CU Medical go up and down completely randomly.
Pair Corralation between InBody CoLtd and CU Medical
Assuming the 90 days trading horizon InBody CoLtd is expected to generate 1.11 times more return on investment than CU Medical. However, InBody CoLtd is 1.11 times more volatile than CU Medical Systems. It trades about 0.0 of its potential returns per unit of risk. CU Medical Systems is currently generating about -0.07 per unit of risk. If you would invest 2,570,058 in InBody CoLtd on November 5, 2024 and sell it today you would lose (160,058) from holding InBody CoLtd or give up 6.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InBody CoLtd vs. CU Medical Systems
Performance |
| Timeline |
| InBody CoLtd |
| CU Medical Systems |
InBody CoLtd and CU Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InBody CoLtd and CU Medical
The main advantage of trading using opposite InBody CoLtd and CU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InBody CoLtd 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.| InBody CoLtd vs. Vieworks Co | InBody CoLtd vs. Genie Music | InBody CoLtd vs. Seegene | InBody CoLtd vs. Medy Tox |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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