Correlation Between SBC Medical and Trio Tech
Can any of the company-specific risk be diversified away by investing in both SBC Medical and Trio Tech 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 Trio Tech 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 Trio Tech International, you can compare the effects of market volatilities on SBC Medical and Trio Tech 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 Trio Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBC Medical and Trio Tech.
Diversification Opportunities for SBC Medical and Trio Tech
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBC and Trio is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SBC Medical Group and Trio Tech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trio Tech International 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 Trio Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trio Tech International has no effect on the direction of SBC Medical i.e., SBC Medical and Trio Tech go up and down completely randomly.
Pair Corralation between SBC Medical and Trio Tech
Assuming the 90 days horizon SBC Medical Group is expected to generate 1.89 times more return on investment than Trio Tech. However, SBC Medical is 1.89 times more volatile than Trio Tech International. It trades about -0.04 of its potential returns per unit of risk. Trio Tech International is currently generating about -0.21 per unit of risk. If you would invest 26.00 in SBC Medical Group on October 24, 2024 and sell it today you would lose (1.00) from holding SBC Medical Group or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBC Medical Group vs. Trio Tech International
Performance |
| Timeline |
| SBC Medical Group |
| Trio Tech International |
SBC Medical and Trio Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBC Medical and Trio Tech
The main advantage of trading using opposite SBC Medical and Trio Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBC Medical position performs unexpectedly, Trio Tech 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 Trio Tech will offset losses from the drop in Trio Tech's long position.| SBC Medical vs. Ihuman Inc | SBC Medical vs. Skillful Craftsman Education | SBC Medical vs. Scholastic | SBC Medical vs. Pinterest |
| Trio Tech vs. Aehr Test Systems | Trio Tech vs. Camtek | Trio Tech vs. Nova | Trio Tech vs. Axcelis Technologies |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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