Correlation Between SS TECH and PLAYWITH

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

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

Diversification Opportunities for SS TECH and PLAYWITH

-0.31

Correlation Coefficient

SS TECH  PLAYWITH

Very good diversification

The 3 months correlation between 101490 and PLAYWITH is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and PLAYWITH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWITH and SS TECH 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 SS TECH are associated (or correlated) with PLAYWITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWITH has no effect on the direction of SS TECH i.e., SS TECH and PLAYWITH go up and down completely randomly.

Pair Corralation between SS TECH and PLAYWITH

Assuming the 90 days trading horizon SS TECH is expected to generate 1.34 times more return on investment than PLAYWITH. However, SS TECH is 1.34 times more volatile than PLAYWITH. It trades about 0.18 of its potential returns per unit of risk. PLAYWITH is currently generating about 0.06 per unit of risk. If you would invest  2,167,024  in SS TECH on December 1, 2024 and sell it today you would earn a total of  772,976  from holding SS TECH or generate 35.67% return on investment over 90 days.

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

SS TECH  vs.  PLAYWITH

SS TECH

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SS TECH are ranked lower than 14 (%) 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.

PLAYWITH

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYWITH are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, PLAYWITH may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SS TECH and PLAYWITH

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

The idea behind SS TECH and PLAYWITH 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.