Correlation Between StShine Optical and United Orthopedic
Can any of the company-specific risk be diversified away by investing in both StShine Optical and United Orthopedic 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 StShine Optical and United Orthopedic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between StShine Optical Co and United Orthopedic, you can compare the effects of market volatilities on StShine Optical and United Orthopedic 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 StShine Optical with a short position of United Orthopedic. Check out your portfolio center. Please also check ongoing floating volatility patterns of StShine Optical and United Orthopedic.
Diversification Opportunities for StShine Optical and United Orthopedic
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between StShine and United is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding StShine Optical Co and United Orthopedic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Orthopedic and StShine Optical 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 StShine Optical Co are associated (or correlated) with United Orthopedic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Orthopedic has no effect on the direction of StShine Optical i.e., StShine Optical and United Orthopedic go up and down completely randomly.
Pair Corralation between StShine Optical and United Orthopedic
Assuming the 90 days trading horizon StShine Optical is expected to generate 37.82 times less return on investment than United Orthopedic. But when comparing it to its historical volatility, StShine Optical Co is 1.9 times less risky than United Orthopedic. It trades about 0.0 of its potential returns per unit of risk. United Orthopedic is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,676 in United Orthopedic on August 30, 2024 and sell it today you would earn a total of 6,144 from holding United Orthopedic or generate 167.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
StShine Optical Co vs. United Orthopedic
Performance |
| Timeline |
| StShine Optical |
| United Orthopedic |
StShine Optical and United Orthopedic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StShine Optical and United Orthopedic
The main advantage of trading using opposite StShine Optical and United Orthopedic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StShine Optical position performs unexpectedly, United Orthopedic 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 United Orthopedic will offset losses from the drop in United Orthopedic's long position.| StShine Optical vs. Sinphar Pharmaceutical Co | StShine Optical vs. Grape King Bio | StShine Optical vs. Apex Biotechnology Corp | StShine Optical vs. Leatec Fine Ceramics |
| United Orthopedic vs. Phoenix Silicon International | United Orthopedic vs. Standard Chemical Pharmaceutical | United Orthopedic vs. Compal Broadband Networks | United Orthopedic vs. Sunspring Metal Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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