Correlation Between Insun Environment and SS TECH

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

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

Diversification Opportunities for Insun Environment and SS TECH

0.33

Correlation Coefficient

Insun Environment  SS TECH

Weak diversification

The 3 months correlation between Insun and 101490 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Insun Environment New and SS TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SS TECH and Insun Environment 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 Insun Environment New are associated (or correlated) with SS TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SS TECH has no effect on the direction of Insun Environment i.e., Insun Environment and SS TECH go up and down completely randomly.

Pair Corralation between Insun Environment and SS TECH

Assuming the 90 days trading horizon Insun Environment is expected to generate 8.19 times less return on investment than SS TECH. But when comparing it to its historical volatility, Insun Environment New is 2.17 times less risky than SS TECH. It trades about 0.08 of its potential returns per unit of risk. SS TECH is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  2,534,821  in SS TECH on October 22, 2024 and sell it today you would earn a total of  420,179  from holding SS TECH or generate 16.58% return on investment over 90 days.

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

Insun Environment New  vs.  SS TECH

Insun Environment New

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Insun Environment New has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Insun Environment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SS TECH

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SS TECH are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SS TECH sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Insun Environment and SS TECH

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

The idea behind Insun Environment New and SS TECH 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.