Correlation Between Cultural Investment and Allmed Medical

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

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

Diversification Opportunities for Cultural Investment and Allmed Medical

-0.18

Correlation Coefficient

Cultural Investment  Allmed Medical

Good diversification

The 3 months correlation between Cultural and Allmed is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cultural Investment Holdings and Allmed Medical Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allmed Medical Products and Cultural Investment 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 Cultural Investment Holdings are associated (or correlated) with Allmed Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allmed Medical Products has no effect on the direction of Cultural Investment i.e., Cultural Investment and Allmed Medical go up and down completely randomly.

Pair Corralation between Cultural Investment and Allmed Medical

Assuming the 90 days trading horizon Cultural Investment Holdings is expected to under-perform the Allmed Medical. But the stock apears to be less risky and, when comparing its historical volatility, Cultural Investment Holdings is 1.21 times less risky than Allmed Medical. The stock trades about -0.04 of its potential returns per unit of risk. The Allmed Medical Products is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  889.00  in Allmed Medical Products on December 28, 2024 and sell it today you would earn a total of  26.00  from holding Allmed Medical Products or generate 2.92% return on investment over 90 days.

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

Cultural Investment Holdings  vs.  Allmed Medical Products

Cultural Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cultural Investment Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cultural Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allmed Medical Products

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allmed Medical Products are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Allmed Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cultural Investment and Allmed Medical

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

The idea behind Cultural Investment Holdings and Allmed Medical Products 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.