Correlation Between StShine Optical and Icares Medicus
Can any of the company-specific risk be diversified away by investing in both StShine Optical and Icares Medicus 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 Icares Medicus 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 Icares Medicus, you can compare the effects of market volatilities on StShine Optical and Icares Medicus 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 Icares Medicus. Check out your portfolio center. Please also check ongoing floating volatility patterns of StShine Optical and Icares Medicus.
Diversification Opportunities for StShine Optical and Icares Medicus
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between StShine and Icares is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding StShine Optical Co and Icares Medicus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icares Medicus 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 Icares Medicus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icares Medicus has no effect on the direction of StShine Optical i.e., StShine Optical and Icares Medicus go up and down completely randomly.
Pair Corralation between StShine Optical and Icares Medicus
Assuming the 90 days trading horizon StShine Optical Co is expected to generate 1.1 times more return on investment than Icares Medicus. However, StShine Optical is 1.1 times more volatile than Icares Medicus. It trades about 0.16 of its potential returns per unit of risk. Icares Medicus is currently generating about -0.24 per unit of risk. If you would invest 21,350 in StShine Optical Co on August 26, 2024 and sell it today you would earn a total of 1,600 from holding StShine Optical Co or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
StShine Optical Co vs. Icares Medicus
Performance |
| Timeline |
| StShine Optical |
| Icares Medicus |
StShine Optical and Icares Medicus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StShine Optical and Icares Medicus
The main advantage of trading using opposite StShine Optical and Icares Medicus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StShine Optical position performs unexpectedly, Icares Medicus 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 Icares Medicus will offset losses from the drop in Icares Medicus' long position.| StShine Optical vs. ESUN Financial Holding | StShine Optical vs. Hua Nan Financial | StShine Optical vs. Tung Ho Steel | StShine Optical vs. CHINA DEVELOPMENT FINANCIAL |
| Icares Medicus vs. StShine Optical Co | Icares Medicus vs. Bioteque | Icares Medicus vs. Medeon Biodesign | Icares Medicus vs. SciVision Biotech |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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