Correlation Between SAFETY MEDICAL and NISSHA
Can any of the company-specific risk be diversified away by investing in both SAFETY MEDICAL and NISSHA 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 SAFETY MEDICAL and NISSHA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAFETY MEDICAL PROD and NISSHA LTD, you can compare the effects of market volatilities on SAFETY MEDICAL and NISSHA 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 SAFETY MEDICAL with a short position of NISSHA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAFETY MEDICAL and NISSHA.
Diversification Opportunities for SAFETY MEDICAL and NISSHA
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAFETY and NISSHA is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SAFETY MEDICAL PROD and NISSHA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSHA LTD and SAFETY 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 SAFETY MEDICAL PROD are associated (or correlated) with NISSHA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSHA LTD has no effect on the direction of SAFETY MEDICAL i.e., SAFETY MEDICAL and NISSHA go up and down completely randomly.
Pair Corralation between SAFETY MEDICAL and NISSHA
Assuming the 90 days trading horizon SAFETY MEDICAL PROD is expected to under-perform the NISSHA. In addition to that, SAFETY MEDICAL is 1.51 times more volatile than NISSHA LTD. It trades about -0.01 of its total potential returns per unit of risk. NISSHA LTD is currently generating about -0.01 per unit of volatility. If you would invest 1,290 in NISSHA LTD on September 3, 2024 and sell it today you would lose (290.00) from holding NISSHA LTD or give up 22.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAFETY MEDICAL PROD vs. NISSHA LTD
Performance |
| Timeline |
| SAFETY MEDICAL PROD |
| NISSHA LTD |
SAFETY MEDICAL and NISSHA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAFETY MEDICAL and NISSHA
The main advantage of trading using opposite SAFETY MEDICAL and NISSHA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAFETY MEDICAL position performs unexpectedly, NISSHA 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 NISSHA will offset losses from the drop in NISSHA's long position.| SAFETY MEDICAL vs. CVS Health | SAFETY MEDICAL vs. FEMALE HEALTH | SAFETY MEDICAL vs. Taylor Morrison Home | SAFETY MEDICAL vs. Autohome ADR |
| NISSHA vs. CompuGroup Medical SE | NISSHA vs. SAFETY MEDICAL PROD | NISSHA vs. Compugroup Medical SE | NISSHA vs. Retail Estates NV |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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