Correlation Between Speed Medical and Contact Financial
Can any of the company-specific risk be diversified away by investing in both Speed Medical and Contact Financial 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 Speed Medical and Contact Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Speed Medical and Contact Financial Holding, you can compare the effects of market volatilities on Speed Medical and Contact Financial 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 Speed Medical with a short position of Contact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Speed Medical and Contact Financial.
Diversification Opportunities for Speed Medical and Contact Financial
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Speed and Contact is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Speed Medical and Contact Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contact Financial Holding and Speed 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 Speed Medical are associated (or correlated) with Contact Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contact Financial Holding has no effect on the direction of Speed Medical i.e., Speed Medical and Contact Financial go up and down completely randomly.
Pair Corralation between Speed Medical and Contact Financial
Assuming the 90 days trading horizon Speed Medical is expected to generate 7.73 times less return on investment than Contact Financial. In addition to that, Speed Medical is 1.03 times more volatile than Contact Financial Holding. It trades about 0.0 of its total potential returns per unit of risk. Contact Financial Holding is currently generating about 0.03 per unit of volatility. If you would invest 395.00 in Contact Financial Holding on September 12, 2024 and sell it today you would earn a total of 62.00 from holding Contact Financial Holding or generate 15.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Speed Medical vs. Contact Financial Holding
Performance |
| Timeline |
| Speed Medical |
| Contact Financial Holding |
Speed Medical and Contact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Speed Medical and Contact Financial
The main advantage of trading using opposite Speed Medical and Contact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Speed Medical position performs unexpectedly, Contact Financial 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 Contact Financial will offset losses from the drop in Contact Financial's long position.| Speed Medical vs. Paint Chemicals Industries | Speed Medical vs. Reacap Financial Investments | Speed Medical vs. Egyptians For Investment | Speed Medical vs. Misr Oils Soap |
| Contact Financial vs. Paint Chemicals Industries | Contact Financial vs. Reacap Financial Investments | Contact Financial vs. Egyptians For Investment | Contact Financial vs. Misr Oils Soap |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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