Correlation Between StShine Optical and Excelsior Medical
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
-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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
StShine Optical Co vs. Excelsior Medical Co
Performance |
Timeline |
StShine Optical |
Excelsior Medical |
StShine Optical and Excelsior Medical Volatility Contrast
Predicted Return Density |
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.StShine Optical vs. Apex Biotechnology Corp | ||
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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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