Correlation Between General Silos and Speed Medical

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

By analyzing existing cross correlation between General Silos Storage and Speed Medical, you can compare the effects of market volatilities on General Silos and Speed 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 General Silos with a short position of Speed Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Silos and Speed Medical.

Diversification Opportunities for General Silos and Speed Medical

0.29

Correlation Coefficient

General Silos  Speed Medical

Modest diversification

The 3 months correlation between General and Speed is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding General Silos Storage and Speed Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Speed Medical and General Silos 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 General Silos Storage are associated (or correlated) with Speed Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Speed Medical has no effect on the direction of General Silos i.e., General Silos and Speed Medical go up and down completely randomly.

Pair Corralation between General Silos and Speed Medical

Assuming the 90 days trading horizon General Silos Storage is expected to generate 1.67 times more return on investment than Speed Medical. However, General Silos is 1.67 times more volatile than Speed Medical. It trades about 0.04 of its potential returns per unit of risk. Speed Medical is currently generating about 0.0 per unit of risk. If you would invest  12,582  in General Silos Storage on September 26, 2024 and sell it today you would earn a total of  4,529  from holding General Silos Storage or generate 36.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

General Silos Storage  vs.  Speed Medical

General Silos Storage

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in General Silos Storage are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, General Silos reported solid returns over the last few months and may actually be approaching a breakup point.

Speed Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Speed Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Speed Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with General Silos and Speed Medical

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

The idea behind General Silos Storage and Speed Medical 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.