Correlation Between Seach Medical and BioLight Life
Can any of the company-specific risk be diversified away by investing in both Seach Medical and BioLight Life 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 BioLight Life 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 BioLight Life Sciences, you can compare the effects of market volatilities on Seach Medical and BioLight Life 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 BioLight Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seach Medical and BioLight Life.
Diversification Opportunities for Seach Medical and BioLight Life
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seach and BioLight is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Seach Medical Group and BioLight Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioLight Life Sciences 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 BioLight Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioLight Life Sciences has no effect on the direction of Seach Medical i.e., Seach Medical and BioLight Life go up and down completely randomly.
Pair Corralation between Seach Medical and BioLight Life
Assuming the 90 days trading horizon Seach Medical Group is expected to generate 0.6 times more return on investment than BioLight Life. However, Seach Medical Group is 1.66 times less risky than BioLight Life. It trades about 0.2 of its potential returns per unit of risk. BioLight Life Sciences is currently generating about 0.06 per unit of risk. If you would invest 15,420 in Seach Medical Group on September 3, 2024 and sell it today you would earn a total of 11,850 from holding Seach Medical Group or generate 76.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seach Medical Group vs. BioLight Life Sciences
Performance |
| Timeline |
| Seach Medical Group |
| BioLight Life Sciences |
Seach Medical and BioLight Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seach Medical and BioLight Life
The main advantage of trading using opposite Seach Medical and BioLight Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seach Medical position performs unexpectedly, BioLight Life 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 BioLight Life will offset losses from the drop in BioLight Life's long position.| Seach Medical vs. Delek Automotive Systems | Seach Medical vs. Alony Hetz Properties | Seach Medical vs. Enlight Renewable Energy | Seach Medical vs. Energix Renewable Energies |
| BioLight Life vs. Homebiogas | BioLight Life vs. Bio Meat Foodtech | BioLight Life vs. Victory Supermarket Chain | BioLight Life vs. Iargento Hi Tech |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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