Correlation Between SCANDMEDICAL SOLDK-040 and Genertec Universal

Can any of the company-specific risk be diversified away by investing in both SCANDMEDICAL SOLDK-040 and Genertec Universal 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 SCANDMEDICAL SOLDK-040 and Genertec Universal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SCANDMEDICAL SOLDK 040 and Genertec Universal Medical, you can compare the effects of market volatilities on SCANDMEDICAL SOLDK-040 and Genertec Universal 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 SCANDMEDICAL SOLDK-040 with a short position of Genertec Universal. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANDMEDICAL SOLDK-040 and Genertec Universal.

Diversification Opportunities for SCANDMEDICAL SOLDK-040 and Genertec Universal

-0.68

Correlation Coefficient

SCANDMEDICAL SOLDK-040  Genertec Universal

Excellent diversification

The 3 months correlation between SCANDMEDICAL and Genertec is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SCANDMEDICAL SOLDK 040 and Genertec Universal Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genertec Universal and SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK 040 are associated (or correlated) with Genertec Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genertec Universal has no effect on the direction of SCANDMEDICAL SOLDK-040 i.e., SCANDMEDICAL SOLDK-040 and Genertec Universal go up and down completely randomly.

Pair Corralation between SCANDMEDICAL SOLDK-040 and Genertec Universal

Assuming the 90 days horizon SCANDMEDICAL SOLDK 040 is expected to generate 2.67 times more return on investment than Genertec Universal. However, SCANDMEDICAL SOLDK-040 is 2.67 times more volatile than Genertec Universal Medical. It trades about 0.02 of its potential returns per unit of risk. Genertec Universal Medical is currently generating about 0.02 per unit of risk. If you would invest  101.00  in SCANDMEDICAL SOLDK 040 on October 24, 2024 and sell it today you would lose (30.00) from holding SCANDMEDICAL SOLDK 040 or give up 29.7% of portfolio value over 90 days.

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

SCANDMEDICAL SOLDK 040  vs.  Genertec Universal Medical

SCANDMEDICAL SOLDK 040

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCANDMEDICAL SOLDK 040 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Genertec Universal

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Genertec Universal Medical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Genertec Universal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SCANDMEDICAL SOLDK-040 and Genertec Universal

The main advantage of trading using opposite SCANDMEDICAL SOLDK-040 and Genertec Universal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANDMEDICAL SOLDK-040 position performs unexpectedly, Genertec Universal 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 Genertec Universal will offset losses from the drop in Genertec Universal's long position.

The idea behind SCANDMEDICAL SOLDK 040 and Genertec Universal 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.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.