Correlation Between Threes Company and Sino Medical

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

By analyzing existing cross correlation between Threes Company Media and Sino Medical Sciences, you can compare the effects of market volatilities on Threes Company and Sino 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 Threes Company with a short position of Sino Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Threes Company and Sino Medical.

Diversification Opportunities for Threes Company and Sino Medical

0.31

Correlation Coefficient

Threes Company  Sino Medical

Weak diversification

The 3 months correlation between Threes and Sino is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Threes Company Media and Sino Medical Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Medical Sciences and Threes Company 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 Threes Company Media are associated (or correlated) with Sino Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Medical Sciences has no effect on the direction of Threes Company i.e., Threes Company and Sino Medical go up and down completely randomly.

Pair Corralation between Threes Company and Sino Medical

Assuming the 90 days trading horizon Threes Company Media is expected to under-perform the Sino Medical. In addition to that, Threes Company is 1.18 times more volatile than Sino Medical Sciences. It trades about -0.15 of its total potential returns per unit of risk. Sino Medical Sciences is currently generating about 0.02 per unit of volatility. If you would invest  1,037  in Sino Medical Sciences on December 25, 2024 and sell it today you would earn a total of  13.00  from holding Sino Medical Sciences or generate 1.25% return on investment over 90 days.

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

Threes Company Media  vs.  Sino Medical Sciences

Threes Company

Risk-Adjusted Performance

Very Weak

Over the last 90 days Threes Company Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sino Medical Sciences

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sino Medical Sciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sino 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 Threes Company and Sino Medical

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

The idea behind Threes Company Media and Sino Medical Sciences 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.