Correlation Between Surgical Science and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Surgical Science and SPDR SP 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 Surgical Science and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surgical Science Sweden and SPDR SP Materials, you can compare the effects of market volatilities on Surgical Science and SPDR SP 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 Surgical Science with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surgical Science and SPDR SP.
Diversification Opportunities for Surgical Science and SPDR SP
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Surgical and SPDR is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Surgical Science Sweden and SPDR SP Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Materials and Surgical Science 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 Surgical Science Sweden are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Materials has no effect on the direction of Surgical Science i.e., Surgical Science and SPDR SP go up and down completely randomly.
Pair Corralation between Surgical Science and SPDR SP
Assuming the 90 days trading horizon Surgical Science is expected to generate 1.16 times less return on investment than SPDR SP. In addition to that, Surgical Science is 3.26 times more volatile than SPDR SP Materials. It trades about 0.01 of its total potential returns per unit of risk. SPDR SP Materials is currently generating about 0.04 per unit of volatility. If you would invest 3,896 in SPDR SP Materials on August 26, 2024 and sell it today you would earn a total of 676.00 from holding SPDR SP Materials or generate 17.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.62% |
| Values | Daily Returns |
Surgical Science Sweden vs. SPDR SP Materials
Performance |
| Timeline |
| Surgical Science Sweden |
| SPDR SP Materials |
Surgical Science and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surgical Science and SPDR SP
The main advantage of trading using opposite Surgical Science and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surgical Science position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Surgical Science vs. Samsung Electronics Co | Surgical Science vs. Samsung Electronics Co | Surgical Science vs. Hyundai Motor | Surgical Science vs. Toyota Motor Corp |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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