Correlation Between Seach Medical and Jacob Finance
Can any of the company-specific risk be diversified away by investing in both Seach Medical and Jacob Finance 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 Jacob Finance 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 Jacob Finance And, you can compare the effects of market volatilities on Seach Medical and Jacob Finance 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 Jacob Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seach Medical and Jacob Finance.
Diversification Opportunities for Seach Medical and Jacob Finance
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Seach and Jacob is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Seach Medical Group and Jacob Finance And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Finance And 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 Jacob Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Finance And has no effect on the direction of Seach Medical i.e., Seach Medical and Jacob Finance go up and down completely randomly.
Pair Corralation between Seach Medical and Jacob Finance
Assuming the 90 days trading horizon Seach Medical Group is expected to generate 1.23 times more return on investment than Jacob Finance. However, Seach Medical is 1.23 times more volatile than Jacob Finance And. It trades about 0.43 of its potential returns per unit of risk. Jacob Finance And is currently generating about 0.11 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seach Medical Group vs. Jacob Finance And
Performance |
| Timeline |
| Seach Medical Group |
| Jacob Finance And |
Seach Medical and Jacob Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seach Medical and Jacob Finance
The main advantage of trading using opposite Seach Medical and Jacob Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seach Medical position performs unexpectedly, Jacob Finance 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 Jacob Finance will offset losses from the drop in Jacob Finance's long position.The idea behind Seach Medical Group and Jacob Finance And 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.| Jacob Finance vs. Tower Semiconductor | Jacob Finance vs. Seach Medical Group | Jacob Finance vs. Libra Insurance | Jacob Finance vs. One Software 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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