Correlation Between Seach Medical and Intelicanna

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

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

Diversification Opportunities for Seach Medical and Intelicanna

0.27

Correlation Coefficient

Seach Medical  Intelicanna

Modest diversification

The 3 months correlation between Seach and Intelicanna is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Seach Medical Group and Intelicanna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelicanna and Seach 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 Seach Medical Group are associated (or correlated) with Intelicanna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelicanna has no effect on the direction of Seach Medical i.e., Seach Medical and Intelicanna go up and down completely randomly.

Pair Corralation between Seach Medical and Intelicanna

Assuming the 90 days trading horizon Seach Medical Group is expected to generate 0.45 times more return on investment than Intelicanna. However, Seach Medical Group is 2.24 times less risky than Intelicanna. It trades about 0.42 of its potential returns per unit of risk. Intelicanna is currently generating about 0.02 per unit of risk. If you would invest  19,590  in Seach Medical Group on September 26, 2024 and sell it today you would earn a total of  11,840  from holding Seach Medical Group or generate 60.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.83%
Values	Daily Returns

Seach Medical Group  vs.  Intelicanna

Seach Medical Group

Risk-Adjusted Performance

33 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Seach Medical Group are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Seach Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Intelicanna

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intelicanna are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Intelicanna is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Seach Medical and Intelicanna

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

The idea behind Seach Medical Group and Intelicanna 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.