Correlation Between SPECTRAL MEDICAL and SCANDMEDICAL SOLDK

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

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

Diversification Opportunities for SPECTRAL MEDICAL and SCANDMEDICAL SOLDK

0.51

Correlation Coefficient

SPECTRAL MEDICAL  SCANDMEDICAL SOLDK

Very weak diversification

The 3 months correlation between SPECTRAL and SCANDMEDICAL is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SPECTRAL MEDICAL and SCANDMEDICAL SOLDK 040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDMEDICAL SOLDK 040 and SPECTRAL 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 SPECTRAL MEDICAL are associated (or correlated) with SCANDMEDICAL SOLDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDMEDICAL SOLDK 040 has no effect on the direction of SPECTRAL MEDICAL i.e., SPECTRAL MEDICAL and SCANDMEDICAL SOLDK go up and down completely randomly.

Pair Corralation between SPECTRAL MEDICAL and SCANDMEDICAL SOLDK

Assuming the 90 days horizon SPECTRAL MEDICAL is expected to under-perform the SCANDMEDICAL SOLDK. In addition to that, SPECTRAL MEDICAL is 1.77 times more volatile than SCANDMEDICAL SOLDK 040. It trades about -0.03 of its total potential returns per unit of risk. SCANDMEDICAL SOLDK 040 is currently generating about -0.05 per unit of volatility. If you would invest  77.00  in SCANDMEDICAL SOLDK 040 on October 26, 2024 and sell it today you would lose (8.00) from holding SCANDMEDICAL SOLDK 040 or give up 10.39% of portfolio value over 90 days.

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

SPECTRAL MEDICAL  vs.  SCANDMEDICAL SOLDK 040

SPECTRAL MEDICAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPECTRAL MEDICAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady 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.

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.

Pair Trading with SPECTRAL MEDICAL and SCANDMEDICAL SOLDK

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

The idea behind SPECTRAL MEDICAL and SCANDMEDICAL SOLDK 040 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.