Correlation Between CU Medical and Solus Advanced
Can any of the company-specific risk be diversified away by investing in both CU Medical and Solus Advanced 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 Solus Advanced 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 Solus Advanced Materials, you can compare the effects of market volatilities on CU Medical and Solus Advanced 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 Solus Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Medical and Solus Advanced.
Diversification Opportunities for CU Medical and Solus Advanced
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 115480 and Solus is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding CU Medical Systems and Solus Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solus Advanced Materials 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 Solus Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solus Advanced Materials has no effect on the direction of CU Medical i.e., CU Medical and Solus Advanced go up and down completely randomly.
Pair Corralation between CU Medical and Solus Advanced
Assuming the 90 days trading horizon CU Medical is expected to generate 1.55 times less return on investment than Solus Advanced. But when comparing it to its historical volatility, CU Medical Systems is 1.96 times less risky than Solus Advanced. It trades about 0.36 of its potential returns per unit of risk. Solus Advanced Materials is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 803,000 in Solus Advanced Materials on October 11, 2024 and sell it today you would earn a total of 149,000 from holding Solus Advanced Materials or generate 18.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
CU Medical Systems vs. Solus Advanced Materials
Performance |
| Timeline |
| CU Medical Systems |
| Solus Advanced Materials |
CU Medical and Solus Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CU Medical and Solus Advanced
The main advantage of trading using opposite CU Medical and Solus Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Medical position performs unexpectedly, Solus Advanced 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 Solus Advanced will offset losses from the drop in Solus Advanced's long position.| CU Medical vs. Cloud Air CoLtd | CU Medical vs. Industrial Bank | CU Medical vs. Jeju Bank | CU Medical vs. Hana Financial |
| Solus Advanced vs. Jeju Semiconductor Corp | Solus Advanced vs. Leaders Technology Investment | Solus Advanced vs. DB Insurance Co | Solus Advanced vs. KTB Investment Securities |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |