Correlation Between Tait Marketing and Excelsior Medical

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

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

Diversification Opportunities for Tait Marketing and Excelsior Medical

0.48

Correlation Coefficient

Tait Marketing  Excelsior Medical

Very weak diversification

The 3 months correlation between Tait and Excelsior is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Tait Marketing Distribution and Excelsior Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelsior Medical and Tait Marketing 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 Tait Marketing Distribution are associated (or correlated) with Excelsior Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelsior Medical has no effect on the direction of Tait Marketing i.e., Tait Marketing and Excelsior Medical go up and down completely randomly.

Pair Corralation between Tait Marketing and Excelsior Medical

Assuming the 90 days trading horizon Tait Marketing Distribution is expected to generate 1.8 times more return on investment than Excelsior Medical. However, Tait Marketing is 1.8 times more volatile than Excelsior Medical Co. It trades about 0.64 of its potential returns per unit of risk. Excelsior Medical Co is currently generating about 0.29 per unit of risk. If you would invest  3,990  in Tait Marketing Distribution on December 10, 2024 and sell it today you would earn a total of  610.00  from holding Tait Marketing Distribution or generate 15.29% return on investment over 90 days.

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

Tait Marketing Distribution  vs.  Excelsior Medical Co

Tait Marketing Distr

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tait Marketing Distribution are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Tait Marketing showed solid returns over the last few months and may actually be approaching a breakup point.

Excelsior Medical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Excelsior Medical Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Excelsior Medical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Tait Marketing and Excelsior Medical

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

The idea behind Tait Marketing Distribution and Excelsior Medical Co 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.