Correlation Between Seach Medical and Abra Information
Can any of the company-specific risk be diversified away by investing in both Seach Medical and Abra Information 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 Seach Medical and Abra Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seach Medical Group and Abra Information Technologies, you can compare the effects of market volatilities on Seach Medical and Abra Information 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 Seach Medical with a short position of Abra Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seach Medical and Abra Information.
Diversification Opportunities for Seach Medical and Abra Information
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seach and Abra is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Seach Medical Group and Abra Information Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abra Information Tec and Seach 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 Seach Medical Group are associated (or correlated) with Abra Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abra Information Tec has no effect on the direction of Seach Medical i.e., Seach Medical and Abra Information go up and down completely randomly.
Pair Corralation between Seach Medical and Abra Information
Assuming the 90 days trading horizon Seach Medical Group is expected to generate 1.48 times more return on investment than Abra Information. However, Seach Medical is 1.48 times more volatile than Abra Information Technologies. It trades about 0.43 of its potential returns per unit of risk. Abra Information Technologies is currently generating about -0.44 per unit of risk. If you would invest 22,830 in Seach Medical Group on August 29, 2024 and sell it today you would earn a total of 5,650 from holding Seach Medical Group or generate 24.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seach Medical Group vs. Abra Information Technologies
Performance |
| Timeline |
| Seach Medical Group |
| Abra Information Tec |
Seach Medical and Abra Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seach Medical and Abra Information
The main advantage of trading using opposite Seach Medical and Abra Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seach Medical position performs unexpectedly, Abra Information 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 Abra Information will offset losses from the drop in Abra Information's long position.The idea behind Seach Medical Group and Abra Information Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Abra Information vs. Seach Medical Group | Abra Information vs. B Communications | Abra Information vs. Migdal Insurance | Abra Information vs. Amanet Management Systems |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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