Correlation Between Sanara Medtech and Pacer Swan

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

By analyzing existing cross correlation between Sanara Medtech and Pacer Swan SOS, you can compare the effects of market volatilities on Sanara Medtech and Pacer Swan 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 Sanara Medtech with a short position of Pacer Swan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanara Medtech and Pacer Swan.

Diversification Opportunities for Sanara Medtech and Pacer Swan

0.66

Correlation Coefficient

Sanara Medtech  Pacer Swan

Poor diversification

The 3 months correlation between Sanara and Pacer is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sanara Medtech and Pacer Swan SOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Swan SOS and Sanara Medtech 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 Sanara Medtech are associated (or correlated) with Pacer Swan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Swan SOS has no effect on the direction of Sanara Medtech i.e., Sanara Medtech and Pacer Swan go up and down completely randomly.

Pair Corralation between Sanara Medtech and Pacer Swan

Given the investment horizon of 90 days Sanara Medtech is expected to generate 17.6 times more return on investment than Pacer Swan. However, Sanara Medtech is 17.6 times more volatile than Pacer Swan SOS. It trades about 0.03 of its potential returns per unit of risk. Pacer Swan SOS is currently generating about 0.31 per unit of risk. If you would invest  3,468  in Sanara Medtech on September 12, 2024 and sell it today you would earn a total of  123.00  from holding Sanara Medtech or generate 3.55% return on investment over 90 days.

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

Sanara Medtech  vs.  Pacer Swan SOS

Sanara Medtech

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sanara Medtech are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Sanara Medtech is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pacer Swan SOS

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pacer Swan SOS are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Pacer Swan is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sanara Medtech and Pacer Swan

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

The idea behind Sanara Medtech and Pacer Swan SOS 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 Transaction History module to view history of all your transactions and understand their impact on performance.