Correlation Between Scienture Holdings, and PetMed Express

Can any of the company-specific risk be diversified away by investing in both Scienture Holdings, and PetMed Express 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 Scienture Holdings, and PetMed Express into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Scienture Holdings, and PetMed Express

0.73

Correlation Coefficient

Scienture Holdings,  PetMed Express

Poor diversification

The 3 months correlation between Scienture and PetMed is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Scienture Holdings, and PetMed Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetMed Express and Scienture Holdings, 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 Scienture Holdings, are associated (or correlated) with PetMed Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetMed Express has no effect on the direction of Scienture Holdings, i.e., Scienture Holdings, and PetMed Express go up and down completely randomly.

Pair Corralation between Scienture Holdings, and PetMed Express

Given the investment horizon of 90 days Scienture Holdings, is expected to under-perform the PetMed Express. In addition to that, Scienture Holdings, is 3.25 times more volatile than PetMed Express. It trades about -0.12 of its total potential returns per unit of risk. PetMed Express is currently generating about -0.05 per unit of volatility. If you would invest  500.00  in PetMed Express on December 29, 2024 and sell it today you would lose (76.00) from holding PetMed Express or give up 15.2% of portfolio value over 90 days.

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

Scienture Holdings,  vs.  PetMed Express

Scienture Holdings,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scienture Holdings, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly 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.

PetMed Express

Risk-Adjusted Performance

Very Weak

Over the last 90 days PetMed Express has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Scienture Holdings, and PetMed Express

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

The idea behind Scienture Holdings, and PetMed Express 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.

Check out your portfolio center.

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.