Correlation Between SBC Medical and East West
Can any of the company-specific risk be diversified away by investing in both SBC Medical and East West 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 SBC Medical and East West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBC Medical Group and East West Bancorp, you can compare the effects of market volatilities on SBC Medical and East West 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 SBC Medical with a short position of East West. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBC Medical and East West.
Diversification Opportunities for SBC Medical and East West
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SBC and East is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SBC Medical Group and East West Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East West Bancorp and SBC 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 SBC Medical Group are associated (or correlated) with East West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East West Bancorp has no effect on the direction of SBC Medical i.e., SBC Medical and East West go up and down completely randomly.
Pair Corralation between SBC Medical and East West
Assuming the 90 days horizon SBC Medical Group is expected to under-perform the East West. In addition to that, SBC Medical is 3.19 times more volatile than East West Bancorp. It trades about -0.1 of its total potential returns per unit of risk. East West Bancorp is currently generating about -0.26 per unit of volatility. If you would invest 10,361 in East West Bancorp on October 11, 2024 and sell it today you would lose (826.00) from holding East West Bancorp or give up 7.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBC Medical Group vs. East West Bancorp
Performance |
| Timeline |
| SBC Medical Group |
| East West Bancorp |
SBC Medical and East West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBC Medical and East West
The main advantage of trading using opposite SBC Medical and East West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBC Medical position performs unexpectedly, East West 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 East West will offset losses from the drop in East West's long position.| SBC Medical vs. East West Bancorp | SBC Medical vs. MYT Netherlands Parent | SBC Medical vs. Fidus Investment Corp | SBC Medical vs. Old Republic International |
| East West vs. Barclays PLC ADR | East West vs. UBS Group AG | East West vs. ING Group NV | East West vs. Citigroup |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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