Correlation Between DSC Investment and Samlip General

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

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

Diversification Opportunities for DSC Investment and Samlip General

0.56

Correlation Coefficient

DSC Investment  Samlip General

Very weak diversification

The 3 months correlation between DSC and Samlip is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding DSC Investment and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General Foods and DSC Investment 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 DSC Investment are associated (or correlated) with Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of DSC Investment i.e., DSC Investment and Samlip General go up and down completely randomly.

Pair Corralation between DSC Investment and Samlip General

Assuming the 90 days trading horizon DSC Investment is expected to generate 1.9 times less return on investment than Samlip General. In addition to that, DSC Investment is 1.28 times more volatile than Samlip General Foods. It trades about 0.04 of its total potential returns per unit of risk. Samlip General Foods is currently generating about 0.09 per unit of volatility. If you would invest  4,872,982  in Samlip General Foods on October 8, 2024 and sell it today you would earn a total of  377,018  from holding Samlip General Foods or generate 7.74% return on investment over 90 days.

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

DSC Investment  vs.  Samlip General Foods

DSC Investment

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DSC Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, DSC Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Samlip General Foods

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with DSC Investment and Samlip General

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

The idea behind DSC Investment and Samlip General Foods 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.