Correlation Between SCANDMEDICAL SOLDK and Focus Home
Can any of the company-specific risk be diversified away by investing in both SCANDMEDICAL SOLDK and Focus Home 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 SCANDMEDICAL SOLDK and Focus Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANDMEDICAL SOLDK 040 and Focus Home Interactive, you can compare the effects of market volatilities on SCANDMEDICAL SOLDK and Focus Home 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 SCANDMEDICAL SOLDK with a short position of Focus Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANDMEDICAL SOLDK and Focus Home.
Diversification Opportunities for SCANDMEDICAL SOLDK and Focus Home
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCANDMEDICAL and Focus is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SCANDMEDICAL SOLDK 040 and Focus Home Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Home Interactive and SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK 040 are associated (or correlated) with Focus Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Home Interactive has no effect on the direction of SCANDMEDICAL SOLDK i.e., SCANDMEDICAL SOLDK and Focus Home go up and down completely randomly.
Pair Corralation between SCANDMEDICAL SOLDK and Focus Home
Assuming the 90 days horizon SCANDMEDICAL SOLDK 040 is expected to under-perform the Focus Home. But the stock apears to be less risky and, when comparing its historical volatility, SCANDMEDICAL SOLDK 040 is 1.7 times less risky than Focus Home. The stock trades about -0.07 of its potential returns per unit of risk. The Focus Home Interactive is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,110 in Focus Home Interactive on October 30, 2024 and sell it today you would lose (10.00) from holding Focus Home Interactive or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCANDMEDICAL SOLDK 040 vs. Focus Home Interactive
Performance |
| Timeline |
| SCANDMEDICAL SOLDK 040 |
| Focus Home Interactive |
SCANDMEDICAL SOLDK and Focus Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANDMEDICAL SOLDK and Focus Home
The main advantage of trading using opposite SCANDMEDICAL SOLDK and Focus Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANDMEDICAL SOLDK position performs unexpectedly, Focus Home 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 Focus Home will offset losses from the drop in Focus Home's long position.| SCANDMEDICAL SOLDK vs. Molson Coors Beverage | SCANDMEDICAL SOLDK vs. PATTIES FOODS | SCANDMEDICAL SOLDK vs. Tyson Foods | SCANDMEDICAL SOLDK vs. Xiwang Special Steel |
| Focus Home vs. Hua Hong Semiconductor | Focus Home vs. SK TELECOM TDADR | Focus Home vs. Comba Telecom Systems | Focus Home vs. Charter Communications |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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