Correlation Between SBC Medical and Sea
Can any of the company-specific risk be diversified away by investing in both SBC Medical and Sea 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 Sea 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 Sea, you can compare the effects of market volatilities on SBC Medical and Sea 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 Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBC Medical and Sea.
Diversification Opportunities for SBC Medical and Sea
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SBC and Sea is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SBC Medical Group and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of SBC Medical i.e., SBC Medical and Sea go up and down completely randomly.
Pair Corralation between SBC Medical and Sea
Assuming the 90 days horizon SBC Medical Group is expected to generate 3.67 times more return on investment than Sea. However, SBC Medical is 3.67 times more volatile than Sea. It trades about 0.18 of its potential returns per unit of risk. Sea is currently generating about 0.05 per unit of risk. If you would invest 7.31 in SBC Medical Group on October 10, 2024 and sell it today you would earn a total of 15.69 from holding SBC Medical Group or generate 214.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 15.56% |
| Values | Daily Returns |
SBC Medical Group vs. Sea
Performance |
| Timeline |
| SBC Medical Group |
| Sea |
SBC Medical and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBC Medical and Sea
The main advantage of trading using opposite SBC Medical and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBC Medical position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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