Correlation Between SBC Medical and GreenPro Capital

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

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

Diversification Opportunities for SBC Medical and GreenPro Capital

0.31

Correlation Coefficient

SBC Medical  GreenPro Capital

Weak diversification

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

Pair Corralation between SBC Medical and GreenPro Capital

Assuming the 90 days horizon SBC Medical Group is expected to under-perform the GreenPro Capital. But the stock apears to be less risky and, when comparing its historical volatility, SBC Medical Group is 1.11 times less risky than GreenPro Capital. The stock trades about -0.05 of its potential returns per unit of risk. The GreenPro Capital Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  96.00  in GreenPro Capital Corp on September 20, 2024 and sell it today you would earn a total of  5.00  from holding GreenPro Capital Corp or generate 5.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

SBC Medical Group  vs.  GreenPro Capital Corp

SBC Medical Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SBC Medical Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SBC Medical showed solid returns over the last few months and may actually be approaching a breakup point.

GreenPro Capital Corp

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GreenPro Capital Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, GreenPro Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SBC Medical and GreenPro Capital

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

The idea behind SBC Medical Group and GreenPro Capital Corp 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.