Correlation Between Sewoon Medical and Cots Technology

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Can any of the company-specific risk be diversified away by investing in both Sewoon Medical and Cots Technology 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 Sewoon Medical and Cots Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sewoon Medical Co and Cots Technology Co, you can compare the effects of market volatilities on Sewoon Medical and Cots Technology 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 Sewoon Medical with a short position of Cots Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sewoon Medical and Cots Technology.

Diversification Opportunities for Sewoon Medical and Cots Technology

SewoonCotsDiversified AwaySewoonCotsDiversified Away100%
0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Sewoon and Cots is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sewoon Medical Co and Cots Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cots Technology and Sewoon Medical 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 Sewoon Medical Co are associated (or correlated) with Cots Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cots Technology has no effect on the direction of Sewoon Medical i.e., Sewoon Medical and Cots Technology go up and down completely randomly.

Pair Corralation between Sewoon Medical and Cots Technology

Assuming the 90 days trading horizon Sewoon Medical is expected to generate 16.98 times less return on investment than Cots Technology. But when comparing it to its historical volatility, Sewoon Medical Co is 3.45 times less risky than Cots Technology. It trades about 0.09 of its potential returns per unit of risk. Cots Technology Co is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest  1,509,000  in Cots Technology Co on November 25, 2024 and sell it today you would earn a total of  413,000  from holding Cots Technology Co or generate 27.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Sewoon Medical Co  vs.  Cots Technology Co

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -25-20-15-10-505
JavaScript chart by amCharts 3.21.15100700 448710
       Timeline  
Sewoon Medical 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Sewoon Medical Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sewoon Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2,2002,2502,3002,3502,4002,4502,5002,5502,600
Cots Technology 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Cots Technology Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cots Technology may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb13,00014,00015,00016,00017,00018,00019,00020,000

Sewoon Medical and Cots Technology Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.39-4.03-2.68-1.330.02281.372.744.15.47 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15100700 448710
       Returns  

Pair Trading with Sewoon Medical and Cots Technology

The main advantage of trading using opposite Sewoon Medical and Cots Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sewoon Medical position performs unexpectedly, Cots Technology 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 Cots Technology will offset losses from the drop in Cots Technology's long position.
The idea behind Sewoon Medical Co and Cots Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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