Correlation Between Futura Medical and Spectra Systems
Can any of the company-specific risk be diversified away by investing in both Futura Medical and Spectra Systems 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 Futura Medical and Spectra Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Futura Medical and Spectra Systems Corp, you can compare the effects of market volatilities on Futura Medical and Spectra Systems 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 Futura Medical with a short position of Spectra Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futura Medical and Spectra Systems.
Diversification Opportunities for Futura Medical and Spectra Systems
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Futura and Spectra is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Futura Medical and Spectra Systems Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectra Systems Corp and Futura 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 Futura Medical are associated (or correlated) with Spectra Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectra Systems Corp has no effect on the direction of Futura Medical i.e., Futura Medical and Spectra Systems go up and down completely randomly.
Pair Corralation between Futura Medical and Spectra Systems
Assuming the 90 days trading horizon Futura Medical is expected to under-perform the Spectra Systems. But the stock apears to be less risky and, when comparing its historical volatility, Futura Medical is 1.04 times less risky than Spectra Systems. The stock trades about -0.36 of its potential returns per unit of risk. The Spectra Systems Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 25,500 in Spectra Systems Corp on September 3, 2024 and sell it today you would lose (500.00) from holding Spectra Systems Corp or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Futura Medical vs. Spectra Systems Corp
Performance |
| Timeline |
| Futura Medical |
| Spectra Systems Corp |
Futura Medical and Spectra Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Futura Medical and Spectra Systems
The main advantage of trading using opposite Futura Medical and Spectra Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futura Medical position performs unexpectedly, Spectra Systems 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 Spectra Systems will offset losses from the drop in Spectra Systems' long position.| Futura Medical vs. Lendinvest PLC | Futura Medical vs. Regions Financial Corp | Futura Medical vs. Dentsply Sirona | Futura Medical vs. Discover Financial Services |
| Spectra Systems vs. Zoom Video Communications | Spectra Systems vs. Futura Medical | Spectra Systems vs. Oakley Capital Investments | Spectra Systems vs. Young Cos Brewery |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |