Correlation Between CU Medical and Wireless Power
Can any of the company-specific risk be diversified away by investing in both CU Medical and Wireless Power 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 Wireless Power 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 Wireless Power Amplifier, you can compare the effects of market volatilities on CU Medical and Wireless Power 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 Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Medical and Wireless Power.
Diversification Opportunities for CU Medical and Wireless Power
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 115480 and Wireless is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding CU Medical Systems and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier 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 Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of CU Medical i.e., CU Medical and Wireless Power go up and down completely randomly.
Pair Corralation between CU Medical and Wireless Power
Assuming the 90 days trading horizon CU Medical is expected to generate 2.46 times less return on investment than Wireless Power. But when comparing it to its historical volatility, CU Medical Systems is 1.04 times less risky than Wireless Power. It trades about 0.09 of its potential returns per unit of risk. Wireless Power Amplifier is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 227,000 in Wireless Power Amplifier on September 19, 2024 and sell it today you would earn a total of 22,500 from holding Wireless Power Amplifier or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CU Medical Systems vs. Wireless Power Amplifier
Performance |
| Timeline |
| CU Medical Systems |
| Wireless Power Amplifier |
CU Medical and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CU Medical and Wireless Power
The main advantage of trading using opposite CU Medical and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Medical position performs unexpectedly, Wireless Power 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 Wireless Power will offset losses from the drop in Wireless Power's long position.| CU Medical vs. Samsung Electronics Co | CU Medical vs. Samsung Electronics Co | CU Medical vs. SK Hynix | CU Medical vs. SK Holdings Co |
| Wireless Power vs. CU Medical Systems | Wireless Power vs. Youngbo Chemical Co | Wireless Power vs. Green Cross Medical | Wireless Power vs. Innowireless Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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