Correlation Between SANOK RUBBER and CRYOLIFE

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

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

Diversification Opportunities for SANOK RUBBER and CRYOLIFE

0.44

Correlation Coefficient

SANOK RUBBER  CRYOLIFE

Very weak diversification

The 3 months correlation between SANOK and CRYOLIFE is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY and CRYOLIFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRYOLIFE and SANOK RUBBER 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 SANOK RUBBER ZY are associated (or correlated) with CRYOLIFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRYOLIFE has no effect on the direction of SANOK RUBBER i.e., SANOK RUBBER and CRYOLIFE go up and down completely randomly.

Pair Corralation between SANOK RUBBER and CRYOLIFE

Assuming the 90 days horizon SANOK RUBBER is expected to generate 1.57 times less return on investment than CRYOLIFE. But when comparing it to its historical volatility, SANOK RUBBER ZY is 1.29 times less risky than CRYOLIFE. It trades about 0.15 of its potential returns per unit of risk. CRYOLIFE is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,435  in CRYOLIFE on October 23, 2024 and sell it today you would earn a total of  525.00  from holding CRYOLIFE or generate 21.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

SANOK RUBBER ZY  vs.  CRYOLIFE

SANOK RUBBER ZY

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SANOK RUBBER ZY are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SANOK RUBBER reported solid returns over the last few months and may actually be approaching a breakup point.

CRYOLIFE

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CRYOLIFE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain essential indicators, CRYOLIFE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SANOK RUBBER and CRYOLIFE

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

The idea behind SANOK RUBBER ZY and CRYOLIFE 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.