Correlation Between Genertec Universal and SPECTRAL MEDICAL

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

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

Diversification Opportunities for Genertec Universal and SPECTRAL MEDICAL

0.49

Correlation Coefficient

Genertec Universal  SPECTRAL MEDICAL

Very weak diversification

The 3 months correlation between Genertec and SPECTRAL is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Genertec Universal Medical and SPECTRAL MEDICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPECTRAL MEDICAL and Genertec Universal 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 Genertec Universal Medical are associated (or correlated) with SPECTRAL MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPECTRAL MEDICAL has no effect on the direction of Genertec Universal i.e., Genertec Universal and SPECTRAL MEDICAL go up and down completely randomly.

Pair Corralation between Genertec Universal and SPECTRAL MEDICAL

Assuming the 90 days horizon Genertec Universal is expected to generate 3.91 times less return on investment than SPECTRAL MEDICAL. But when comparing it to its historical volatility, Genertec Universal Medical is 1.51 times less risky than SPECTRAL MEDICAL. It trades about 0.05 of its potential returns per unit of risk. SPECTRAL MEDICAL is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  30.00  in SPECTRAL MEDICAL on December 22, 2024 and sell it today you would earn a total of  11.00  from holding SPECTRAL MEDICAL or generate 36.67% return on investment over 90 days.

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

Genertec Universal Medical  vs.  SPECTRAL MEDICAL

Genertec Universal

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genertec Universal Medical are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Genertec Universal may actually be approaching a critical reversion point that can send shares even higher in April 2025.

SPECTRAL MEDICAL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPECTRAL MEDICAL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SPECTRAL MEDICAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genertec Universal and SPECTRAL MEDICAL

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

The idea behind Genertec Universal Medical and SPECTRAL 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.