Correlation Between Seach Medical and Teuza A
Can any of the company-specific risk be diversified away by investing in both Seach Medical and Teuza A 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 Teuza A 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 Teuza A Fairchild, you can compare the effects of market volatilities on Seach Medical and Teuza A 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 Teuza A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seach Medical and Teuza A.
Diversification Opportunities for Seach Medical and Teuza A
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seach and Teuza is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Seach Medical Group and Teuza A Fairchild in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teuza A Fairchild 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 Teuza A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teuza A Fairchild has no effect on the direction of Seach Medical i.e., Seach Medical and Teuza A go up and down completely randomly.
Pair Corralation between Seach Medical and Teuza A
Assuming the 90 days trading horizon Seach Medical Group is expected to generate 0.5 times more return on investment than Teuza A. However, Seach Medical Group is 2.0 times less risky than Teuza A. It trades about 0.08 of its potential returns per unit of risk. Teuza A Fairchild is currently generating about -0.19 per unit of risk. If you would invest 26,670 in Seach Medical Group on September 4, 2024 and sell it today you would earn a total of 600.00 from holding Seach Medical Group or generate 2.25% 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. Teuza A Fairchild
Performance |
| Timeline |
| Seach Medical Group |
| Teuza A Fairchild |
Seach Medical and Teuza A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seach Medical and Teuza A
The main advantage of trading using opposite Seach Medical and Teuza A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seach Medical position performs unexpectedly, Teuza A 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 Teuza A will offset losses from the drop in Teuza A's long position.| Seach Medical vs. Bezeq Israeli Telecommunication | Seach Medical vs. Rapac Communication Infrastructure | Seach Medical vs. Ilex Medical | Seach Medical vs. Electreon Wireless |
| Teuza A vs. Bank Hapoalim | Teuza A vs. Israel Discount Bank | Teuza A vs. First International Bank | Teuza A vs. Elbit 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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