Correlation Between Asiri Surgical and Sanasa Development

Can any of the company-specific risk be diversified away by investing in both Asiri Surgical and Sanasa Development 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 Asiri Surgical and Sanasa Development into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asiri Surgical Hospital and Sanasa Development Bank, you can compare the effects of market volatilities on Asiri Surgical and Sanasa Development 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 Asiri Surgical with a short position of Sanasa Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiri Surgical and Sanasa Development.

Diversification Opportunities for Asiri Surgical and Sanasa Development

-0.19

Correlation Coefficient

Asiri Surgical  Sanasa Development

Good diversification

The 3 months correlation between Asiri and Sanasa is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Asiri Surgical Hospital and Sanasa Development Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanasa Development Bank and Asiri Surgical 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 Asiri Surgical Hospital are associated (or correlated) with Sanasa Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanasa Development Bank has no effect on the direction of Asiri Surgical i.e., Asiri Surgical and Sanasa Development go up and down completely randomly.

Pair Corralation between Asiri Surgical and Sanasa Development

Assuming the 90 days trading horizon Asiri Surgical Hospital is expected to under-perform the Sanasa Development. In addition to that, Asiri Surgical is 1.32 times more volatile than Sanasa Development Bank. It trades about -0.04 of its total potential returns per unit of risk. Sanasa Development Bank is currently generating about 0.13 per unit of volatility. If you would invest  2,990  in Sanasa Development Bank on September 18, 2024 and sell it today you would earn a total of  340.00  from holding Sanasa Development Bank or generate 11.37% return on investment over 90 days.

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

Asiri Surgical Hospital  vs.  Sanasa Development Bank

Asiri Surgical Hospital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asiri Surgical Hospital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Asiri Surgical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sanasa Development Bank

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sanasa Development Bank are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sanasa Development may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Asiri Surgical and Sanasa Development

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

The idea behind Asiri Surgical Hospital and Sanasa Development Bank 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .