Correlation Between SPECTRAL MEDICAL and CarsalesCom

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

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

Diversification Opportunities for SPECTRAL MEDICAL and CarsalesCom

0.49

Correlation Coefficient

SPECTRAL MEDICAL  CarsalesCom

Very weak diversification

The 3 months correlation between SPECTRAL and CarsalesCom is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SPECTRAL MEDICAL and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of SPECTRAL MEDICAL i.e., SPECTRAL MEDICAL and CarsalesCom go up and down completely randomly.

Pair Corralation between SPECTRAL MEDICAL and CarsalesCom

Assuming the 90 days horizon SPECTRAL MEDICAL is expected to generate 3.16 times less return on investment than CarsalesCom. In addition to that, SPECTRAL MEDICAL is 1.42 times more volatile than CarsalesCom. It trades about 0.04 of its total potential returns per unit of risk. CarsalesCom is currently generating about 0.17 per unit of volatility. If you would invest  1,770  in CarsalesCom on April 20, 2025 and sell it today you would earn a total of  330.00  from holding CarsalesCom or generate 18.64% return on investment over 90 days.

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

SPECTRAL MEDICAL  vs.  CarsalesCom

SPECTRAL MEDICAL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPECTRAL MEDICAL are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SPECTRAL MEDICAL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

CarsalesCom

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CarsalesCom are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CarsalesCom reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPECTRAL MEDICAL and CarsalesCom

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

The idea behind SPECTRAL MEDICAL and CarsalesCom 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.