Correlation Between StShine Optical and Excelsior Medical

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Can any of the company-specific risk be diversified away by investing in both StShine Optical and Excelsior 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 StShine Optical and Excelsior Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between StShine Optical Co and Excelsior Medical Co, you can compare the effects of market volatilities on StShine Optical and Excelsior 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 StShine Optical with a short position of Excelsior Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of StShine Optical and Excelsior Medical.

Diversification Opportunities for StShine Optical and Excelsior Medical

StShineExcelsiorDiversified AwayStShineExcelsiorDiversified Away100%
-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between StShine and Excelsior is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding StShine Optical Co and Excelsior Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelsior Medical and StShine Optical 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 StShine Optical Co are associated (or correlated) with Excelsior Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelsior Medical has no effect on the direction of StShine Optical i.e., StShine Optical and Excelsior Medical go up and down completely randomly.

Pair Corralation between StShine Optical and Excelsior Medical

Assuming the 90 days trading horizon StShine Optical Co is expected to generate 8.14 times more return on investment than Excelsior Medical. However, StShine Optical is 8.14 times more volatile than Excelsior Medical Co. It trades about 0.1 of its potential returns per unit of risk. Excelsior Medical Co is currently generating about 0.01 per unit of risk. If you would invest  17,650  in StShine Optical Co on September 13, 2024 and sell it today you would earn a total of  2,700  from holding StShine Optical Co or generate 15.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

StShine Optical Co  vs.  Excelsior Medical Co

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 010203040
JavaScript chart by amCharts 3.21.151565 4104
       Timeline  
StShine Optical 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in StShine Optical Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, StShine Optical showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec180190200210220230240
Excelsior Medical 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Excelsior Medical Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Excelsior Medical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec8686.58787.58888.5

StShine Optical and Excelsior Medical Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.51-5.62-3.74-1.850.01.933.935.927.929.92 1234
JavaScript chart by amCharts 3.21.151565 4104
       Returns  

Pair Trading with StShine Optical and Excelsior Medical

The main advantage of trading using opposite StShine Optical and Excelsior Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StShine Optical position performs unexpectedly, Excelsior 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 Excelsior Medical will offset losses from the drop in Excelsior Medical's long position.
The idea behind StShine Optical Co and Excelsior Medical Co 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.
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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