Correlation Between Clarkson PLC and SSC Technologies

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

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

Diversification Opportunities for Clarkson PLC and SSC Technologies

0.78

Correlation Coefficient

Clarkson PLC  SSC Technologies

Poor diversification

The 3 months correlation between Clarkson and SSC is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Clarkson PLC and SSC Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Technologies Holdings and Clarkson PLC 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 Clarkson PLC are associated (or correlated) with SSC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Technologies Holdings has no effect on the direction of Clarkson PLC i.e., Clarkson PLC and SSC Technologies go up and down completely randomly.

Pair Corralation between Clarkson PLC and SSC Technologies

Assuming the 90 days horizon Clarkson PLC is expected to generate 1.02 times less return on investment than SSC Technologies. In addition to that, Clarkson PLC is 1.31 times more volatile than SSC Technologies Holdings. It trades about 0.08 of its total potential returns per unit of risk. SSC Technologies Holdings is currently generating about 0.11 per unit of volatility. If you would invest  6,627  in SSC Technologies Holdings on September 27, 2024 and sell it today you would earn a total of  623.00  from holding SSC Technologies Holdings or generate 9.4% return on investment over 90 days.

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

Clarkson PLC  vs.  SSC Technologies Holdings

Clarkson PLC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Clarkson PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Clarkson PLC may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SSC Technologies Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SSC Technologies Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SSC Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Clarkson PLC and SSC Technologies

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

The idea behind Clarkson PLC and SSC Technologies Holdings 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.