Correlation Between StShine Optical and United Orthopedic

Can any of the company-specific risk be diversified away by investing in both StShine Optical and United Orthopedic 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 United Orthopedic 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 United Orthopedic, you can compare the effects of market volatilities on StShine Optical and United Orthopedic 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 United Orthopedic. Check out your portfolio center. Please also check ongoing floating volatility patterns of StShine Optical and United Orthopedic.

Diversification Opportunities for StShine Optical and United Orthopedic

0.0

Correlation Coefficient

StShine Optical  United Orthopedic

Pay attention - limited upside

The 3 months correlation between StShine and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding StShine Optical Co and United Orthopedic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Orthopedic 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 United Orthopedic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Orthopedic has no effect on the direction of StShine Optical i.e., StShine Optical and United Orthopedic go up and down completely randomly.

Pair Corralation between StShine Optical and United Orthopedic

If you would invest  0.00  in United Orthopedic on December 29, 2024 and sell it today you would earn a total of  0.00  from holding United Orthopedic or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.79%
Values	Daily Returns

StShine Optical Co  vs.  United Orthopedic

StShine Optical

Risk-Adjusted Performance

Very Weak

Over the last 90 days StShine Optical Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, StShine Optical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

United Orthopedic

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Orthopedic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, United Orthopedic is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with StShine Optical and United Orthopedic

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

The idea behind StShine Optical Co and United Orthopedic 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.