Correlation Between SSC Technologies and Terumo Corp

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Can any of the company-specific risk be diversified away by investing in both SSC Technologies and Terumo Corp 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 SSC Technologies and Terumo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSC Technologies and Terumo Corp ADR, you can compare the effects of market volatilities on SSC Technologies and Terumo Corp 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 SSC Technologies with a short position of Terumo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSC Technologies and Terumo Corp.

Diversification Opportunities for SSC Technologies and Terumo Corp

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between SSC Technologies and Terumo is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SSC Technologies and Terumo Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terumo Corp ADR and SSC Technologies 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 SSC Technologies are associated (or correlated) with Terumo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terumo Corp ADR has no effect on the direction of SSC Technologies i.e., SSC Technologies and Terumo Corp go up and down completely randomly.

Pair Corralation between SSC Technologies and Terumo Corp

Given the investment horizon of 90 days SSC Technologies is expected to generate 0.96 times more return on investment than Terumo Corp. However, SSC Technologies is 1.04 times less risky than Terumo Corp. It trades about -0.05 of its potential returns per unit of risk. Terumo Corp ADR is currently generating about -0.07 per unit of risk. If you would invest  5,615  in SSC Technologies on August 30, 2022 and sell it today you would lose (396.00)  from holding SSC Technologies or give up 7.05% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.44%
ValuesDaily Returns

SSC Technologies  vs.  Terumo Corp ADR

 Performance (%) 
       Timeline  
SSC Technologies 
SSC Technologies Performance
0 of 100
Over the last 90 days SSC Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SSC Technologies is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

SSC Technologies Price Channel

Terumo Corp ADR 
Terumo Performance
0 of 100
Over the last 90 days Terumo Corp ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Terumo Price Channel

SSC Technologies and Terumo Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SSC Technologies and Terumo Corp

The main advantage of trading using opposite SSC Technologies and Terumo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSC Technologies position performs unexpectedly, Terumo Corp 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 Terumo Corp will offset losses from the drop in Terumo Corp's long position.
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The idea behind SSC Technologies and Terumo Corp ADR 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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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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