Correlation Between Cohen Dev and Seach Medical

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

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

Diversification Opportunities for Cohen Dev and Seach Medical

0.35

Correlation Coefficient

Cohen Dev  Seach Medical

Weak diversification

The 3 months correlation between Cohen and Seach is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cohen Dev and Seach Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seach Medical Group and Cohen Dev 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 Cohen Dev are associated (or correlated) with Seach Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seach Medical Group has no effect on the direction of Cohen Dev i.e., Cohen Dev and Seach Medical go up and down completely randomly.

Pair Corralation between Cohen Dev and Seach Medical

Assuming the 90 days trading horizon Cohen Dev is expected to generate 0.56 times more return on investment than Seach Medical. However, Cohen Dev is 1.79 times less risky than Seach Medical. It trades about 0.24 of its potential returns per unit of risk. Seach Medical Group is currently generating about -0.05 per unit of risk. If you would invest  1,345,000  in Cohen Dev on December 30, 2024 and sell it today you would earn a total of  353,000  from holding Cohen Dev or generate 26.25% return on investment over 90 days.

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

Cohen Dev  vs.  Seach Medical Group

Cohen Dev

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Dev are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cohen Dev sustained solid returns over the last few months and may actually be approaching a breakup point.

Seach Medical Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seach Medical Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Cohen Dev and Seach Medical

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

The idea behind Cohen Dev and Seach Medical Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.