Correlation Between Seach Medical and Savoreat

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

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

Diversification Opportunities for Seach Medical and Savoreat

-0.21

Correlation Coefficient

Seach Medical  Savoreat

Very good diversification

The 3 months correlation between Seach and Savoreat is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Seach Medical Group and Savoreat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Savoreat and Seach 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 Seach Medical Group are associated (or correlated) with Savoreat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Savoreat has no effect on the direction of Seach Medical i.e., Seach Medical and Savoreat go up and down completely randomly.

Pair Corralation between Seach Medical and Savoreat

Assuming the 90 days trading horizon Seach Medical Group is expected to generate 0.95 times more return on investment than Savoreat. However, Seach Medical Group is 1.05 times less risky than Savoreat. It trades about -0.05 of its potential returns per unit of risk. Savoreat is currently generating about -0.22 per unit of risk. If you would invest  30,020  in Seach Medical Group on December 30, 2024 and sell it today you would lose (3,670) from holding Seach Medical Group or give up 12.23% of portfolio value over 90 days.

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

Seach Medical Group  vs.  Savoreat

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.

Savoreat

Risk-Adjusted Performance

Very Weak

Over the last 90 days Savoreat has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat 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.

Pair Trading with Seach Medical and Savoreat

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

The idea behind Seach Medical Group and Savoreat 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.