Correlation Between SECOM CO and Peijia Medical
Can any of the company-specific risk be diversified away by investing in both SECOM CO and Peijia Medical 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 SECOM CO and Peijia Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SECOM LTD and Peijia Medical Limited, you can compare the effects of market volatilities on SECOM CO and Peijia Medical 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 SECOM CO with a short position of Peijia Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECOM CO and Peijia Medical.
Diversification Opportunities for SECOM CO and Peijia Medical
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SECOM and Peijia is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding SECOM LTD and Peijia Medical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peijia Medical and SECOM CO 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 SECOM LTD are associated (or correlated) with Peijia Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peijia Medical has no effect on the direction of SECOM CO i.e., SECOM CO and Peijia Medical go up and down completely randomly.
Pair Corralation between SECOM CO and Peijia Medical
Assuming the 90 days horizon SECOM LTD is expected to generate 0.64 times more return on investment than Peijia Medical. However, SECOM LTD is 1.57 times less risky than Peijia Medical. It trades about -0.04 of its potential returns per unit of risk. Peijia Medical Limited is currently generating about -0.1 per unit of risk. If you would invest 3,240 in SECOM LTD on October 19, 2024 and sell it today you would lose (40.00) from holding SECOM LTD or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SECOM LTD vs. Peijia Medical Limited
Performance |
| Timeline |
| SECOM LTD |
| Peijia Medical |
SECOM CO and Peijia Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SECOM CO and Peijia Medical
The main advantage of trading using opposite SECOM CO and Peijia Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SECOM CO position performs unexpectedly, Peijia Medical 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 Peijia Medical will offset losses from the drop in Peijia Medical's long position.| SECOM CO vs. Peijia Medical Limited | SECOM CO vs. Advanced Medical Solutions | SECOM CO vs. PLAYMATES TOYS | SECOM CO vs. United Utilities Group |
| Peijia Medical vs. CN MODERN DAIRY | Peijia Medical vs. AUSNUTRIA DAIRY | Peijia Medical vs. LIFEWAY FOODS | Peijia Medical vs. Thai Beverage Public |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges |