Correlation Between Old Republic and SBC Medical
Can any of the company-specific risk be diversified away by investing in both Old Republic 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 Old Republic and SBC Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Republic International and SBC Medical Group, you can compare the effects of market volatilities on Old Republic 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 Old Republic with a short position of SBC Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Republic and SBC Medical.
Diversification Opportunities for Old Republic and SBC Medical
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Old and SBC is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International 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 Old Republic 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 Old Republic International 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 Old Republic i.e., Old Republic and SBC Medical go up and down completely randomly.
Pair Corralation between Old Republic and SBC Medical
Considering the 90-day investment horizon Old Republic is expected to generate 20.78 times less return on investment than SBC Medical. But when comparing it to its historical volatility, Old Republic International is 9.52 times less risky than SBC Medical. It trades about 0.08 of its potential returns per unit of risk. SBC Medical Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 7.31 in SBC Medical Group on October 27, 2024 and sell it today you would earn a total of 17.69 from holding SBC Medical Group or generate 242.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 17.81% |
| Values | Daily Returns |
Old Republic International vs. SBC Medical Group
Performance |
| Timeline |
| Old Republic Interna |
| SBC Medical Group |
Old Republic and SBC Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Republic and SBC Medical
The main advantage of trading using opposite Old Republic and SBC Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Republic 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.| Old Republic vs. Axa Equitable Holdings | Old Republic vs. American International Group | Old Republic vs. Arch Capital Group | Old Republic vs. Sun Life Financial |
| SBC Medical vs. Barings BDC | SBC Medical vs. Univest Pennsylvania | SBC Medical vs. Senmiao Technology | SBC Medical vs. Videolocity International |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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