Correlation Between SANUWAVE Health and ImmuCell

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

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

Diversification Opportunities for SANUWAVE Health and ImmuCell

0.45

Correlation Coefficient

SANUWAVE Health  ImmuCell

Very weak diversification

The 3 months correlation between SANUWAVE and ImmuCell is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SANUWAVE Health and ImmuCell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmuCell and SANUWAVE Health 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 SANUWAVE Health are associated (or correlated) with ImmuCell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmuCell has no effect on the direction of SANUWAVE Health i.e., SANUWAVE Health and ImmuCell go up and down completely randomly.

Pair Corralation between SANUWAVE Health and ImmuCell

Given the investment horizon of 90 days SANUWAVE Health is expected to generate 26.13 times more return on investment than ImmuCell. However, SANUWAVE Health is 26.13 times more volatile than ImmuCell. It trades about 0.09 of its potential returns per unit of risk. ImmuCell is currently generating about 0.06 per unit of risk. If you would invest  675.00  in SANUWAVE Health on October 7, 2024 and sell it today you would earn a total of  1,526  from holding SANUWAVE Health or generate 226.07% return on investment over 90 days.

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

SANUWAVE Health  vs.  ImmuCell

SANUWAVE Health

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SANUWAVE Health are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SANUWAVE Health showed solid returns over the last few months and may actually be approaching a breakup point.

ImmuCell

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ImmuCell are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, ImmuCell exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SANUWAVE Health and ImmuCell

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

The idea behind SANUWAVE Health and ImmuCell 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.