Correlation Between CU Medical and SV Investment
Can any of the company-specific risk be diversified away by investing in both CU Medical and SV Investment 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 CU Medical and SV Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CU Medical Systems and SV Investment, you can compare the effects of market volatilities on CU Medical and SV Investment 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 CU Medical with a short position of SV Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Medical and SV Investment.
Diversification Opportunities for CU Medical and SV Investment
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 115480 and 289080 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CU Medical Systems and SV Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SV Investment and CU 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 CU Medical Systems are associated (or correlated) with SV Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SV Investment has no effect on the direction of CU Medical i.e., CU Medical and SV Investment go up and down completely randomly.
Pair Corralation between CU Medical and SV Investment
Assuming the 90 days trading horizon CU Medical Systems is expected to under-perform the SV Investment. But the stock apears to be less risky and, when comparing its historical volatility, CU Medical Systems is 1.41 times less risky than SV Investment. The stock trades about -0.07 of its potential returns per unit of risk. The SV Investment is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 244,044 in SV Investment on November 2, 2024 and sell it today you would lose (115,344) from holding SV Investment or give up 47.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CU Medical Systems vs. SV Investment
Performance |
| Timeline |
| CU Medical Systems |
| SV Investment |
CU Medical and SV Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CU Medical and SV Investment
The main advantage of trading using opposite CU Medical and SV Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Medical position performs unexpectedly, SV Investment 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 SV Investment will offset losses from the drop in SV Investment's long position.| CU Medical vs. SS TECH | CU Medical vs. Vitzro Tech Co | CU Medical vs. SK Chemicals Co | CU Medical vs. DoubleU Games Co |
| SV Investment vs. Nice Information Telecommunication | SV Investment vs. Atinum Investment Co | SV Investment vs. Sangsangin Investment Securities | SV Investment vs. DB Financial Investment |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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