Correlation Between Total Soft and CU Medical
Can any of the company-specific risk be diversified away by investing in both Total Soft 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 Total Soft and CU Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Soft Bank and CU Medical Systems, you can compare the effects of market volatilities on Total Soft 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 Total Soft with a short position of CU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Soft and CU Medical.
Diversification Opportunities for Total Soft and CU Medical
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Total and 115480 is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Total Soft Bank 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 Total Soft 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 Total Soft Bank 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 Total Soft i.e., Total Soft and CU Medical go up and down completely randomly.
Pair Corralation between Total Soft and CU Medical
Assuming the 90 days trading horizon Total Soft Bank is expected to generate 1.57 times more return on investment than CU Medical. However, Total Soft is 1.57 times more volatile than CU Medical Systems. It trades about 0.02 of its potential returns per unit of risk. CU Medical Systems is currently generating about -0.06 per unit of risk. If you would invest 432,500 in Total Soft Bank on August 30, 2024 and sell it today you would earn a total of 38,500 from holding Total Soft Bank or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Soft Bank vs. CU Medical Systems
Performance |
| Timeline |
| Total Soft Bank |
| CU Medical Systems |
Total Soft and CU Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Soft and CU Medical
The main advantage of trading using opposite Total Soft and CU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Soft 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.| Total Soft vs. Lotte Energy Materials | Total Soft vs. EV Advanced Material | Total Soft vs. TOPMATERIAL LTD | Total Soft vs. Inzi Display CoLtd |
| CU Medical vs. Samsung Electronics Co | CU Medical vs. Samsung Electronics Co | CU Medical vs. LG Energy Solution | CU Medical vs. SK Hynix |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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