Correlation Between NYSE Composite and SBC Medical
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and SBC Medical 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 NYSE Composite and SBC Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and SBC Medical Group, you can compare the effects of market volatilities on NYSE Composite and SBC Medical 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 NYSE Composite with a short position of SBC Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and SBC Medical.
Diversification Opportunities for NYSE Composite and SBC Medical
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and SBC is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and SBC Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBC Medical Group and NYSE Composite 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 NYSE Composite are associated (or correlated) with SBC Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBC Medical Group has no effect on the direction of NYSE Composite i.e., NYSE Composite and SBC Medical go up and down completely randomly.
Pair Corralation between NYSE Composite and SBC Medical
Assuming the 90 days trading horizon NYSE Composite is expected to generate 50.72 times less return on investment than SBC Medical. But when comparing it to its historical volatility, NYSE Composite is 17.38 times less risky than SBC Medical. It trades about 0.06 of its potential returns per unit of risk. SBC Medical Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 7.31 in SBC Medical Group on October 9, 2024 and sell it today you would earn a total of 16.69 from holding SBC Medical Group or generate 228.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 15.56% |
| Values | Daily Returns |
NYSE Composite vs. SBC Medical Group
Performance |
| Timeline |
NYSE Composite and SBC Medical Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
SBC Medical Group
Pair trading matchups for SBC Medical
Pair Trading with NYSE Composite and SBC Medical
The main advantage of trading using opposite NYSE Composite and SBC Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, SBC Medical 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 SBC Medical will offset losses from the drop in SBC Medical's long position.| NYSE Composite vs. Zumiez Inc | NYSE Composite vs. Dennys Corp | NYSE Composite vs. Boyd Gaming | NYSE Composite vs. Triumph Apparel |
| SBC Medical vs. Nascent Wine | SBC Medical vs. Grocery Outlet Holding | SBC Medical vs. China Tontine Wines | SBC Medical vs. Primo Brands |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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