Correlation Between 3BB INTERNET and SAF Special

Can any of the company-specific risk be diversified away by investing in both 3BB INTERNET and SAF Special 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 3BB INTERNET and SAF Special into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 3BB INTERNET INFRASTRUCTURE and SAF Special Steel, you can compare the effects of market volatilities on 3BB INTERNET and SAF Special 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 3BB INTERNET with a short position of SAF Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3BB INTERNET and SAF Special.

Diversification Opportunities for 3BB INTERNET and SAF Special

0.03

Correlation Coefficient

3BB INTERNET  SAF Special

Significant diversification

The 3 months correlation between 3BB and SAF is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding 3BB INTERNET INFRASTRUCTURE and SAF Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAF Special Steel and 3BB INTERNET 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 3BB INTERNET INFRASTRUCTURE are associated (or correlated) with SAF Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAF Special Steel has no effect on the direction of 3BB INTERNET i.e., 3BB INTERNET and SAF Special go up and down completely randomly.

Pair Corralation between 3BB INTERNET and SAF Special

Assuming the 90 days trading horizon 3BB INTERNET INFRASTRUCTURE is expected to generate 0.45 times more return on investment than SAF Special. However, 3BB INTERNET INFRASTRUCTURE is 2.23 times less risky than SAF Special. It trades about 0.17 of its potential returns per unit of risk. SAF Special Steel is currently generating about 0.01 per unit of risk. If you would invest  504.00  in 3BB INTERNET INFRASTRUCTURE on December 28, 2024 and sell it today you would earn a total of  61.00  from holding 3BB INTERNET INFRASTRUCTURE or generate 12.1% return on investment over 90 days.

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

3BB INTERNET INFRASTRUCTURE  vs.  SAF Special Steel

3BB INTERNET INFRAST

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 3BB INTERNET INFRASTRUCTURE are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, 3BB INTERNET may actually be approaching a critical reversion point that can send shares even higher in April 2025.

SAF Special Steel

Risk-Adjusted Performance

Very Weak

Over the last 90 days SAF Special Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, SAF Special is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with 3BB INTERNET and SAF Special

The main advantage of trading using opposite 3BB INTERNET and SAF Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3BB INTERNET position performs unexpectedly, SAF Special 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 SAF Special will offset losses from the drop in SAF Special's long position.

The idea behind 3BB INTERNET INFRASTRUCTURE and SAF Special Steel 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.