Correlation Between Cengild Medical and Silver Ridge

Can any of the company-specific risk be diversified away by investing in both Cengild Medical and Silver Ridge 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 Cengild Medical and Silver Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cengild Medical Berhad and Silver Ridge Holdings, you can compare the effects of market volatilities on Cengild Medical and Silver Ridge 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 Cengild Medical with a short position of Silver Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cengild Medical and Silver Ridge.

Diversification Opportunities for Cengild Medical and Silver Ridge

-0.02

Correlation Coefficient

Cengild Medical  Silver Ridge

Good diversification

The 3 months correlation between Cengild and Silver is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cengild Medical Berhad and Silver Ridge Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Ridge Holdings and Cengild 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 Cengild Medical Berhad are associated (or correlated) with Silver Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Ridge Holdings has no effect on the direction of Cengild Medical i.e., Cengild Medical and Silver Ridge go up and down completely randomly.

Pair Corralation between Cengild Medical and Silver Ridge

Assuming the 90 days trading horizon Cengild Medical is expected to generate 3.74 times less return on investment than Silver Ridge. But when comparing it to its historical volatility, Cengild Medical Berhad is 1.72 times less risky than Silver Ridge. It trades about 0.04 of its potential returns per unit of risk. Silver Ridge Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  39.00  in Silver Ridge Holdings on September 27, 2024 and sell it today you would earn a total of  6.00  from holding Silver Ridge Holdings or generate 15.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cengild Medical Berhad  vs.  Silver Ridge Holdings

Cengild Medical Berhad

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cengild Medical Berhad are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Cengild Medical is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Silver Ridge Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Ridge Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Silver Ridge disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cengild Medical and Silver Ridge

The main advantage of trading using opposite Cengild Medical and Silver Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cengild Medical position performs unexpectedly, Silver Ridge 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 Silver Ridge will offset losses from the drop in Silver Ridge's long position.

The idea behind Cengild Medical Berhad and Silver Ridge Holdings 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.