Correlation Between Sysgration and IBASE Technology

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

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

Diversification Opportunities for Sysgration and IBASE Technology

-0.65

Correlation Coefficient

Sysgration  IBASE Technology

Excellent diversification

The 3 months correlation between Sysgration and IBASE is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sysgration and IBASE Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBASE Technology and Sysgration 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 Sysgration are associated (or correlated) with IBASE Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBASE Technology has no effect on the direction of Sysgration i.e., Sysgration and IBASE Technology go up and down completely randomly.

Pair Corralation between Sysgration and IBASE Technology

Assuming the 90 days trading horizon Sysgration is expected to generate 1.21 times more return on investment than IBASE Technology. However, Sysgration is 1.21 times more volatile than IBASE Technology. It trades about 0.01 of its potential returns per unit of risk. IBASE Technology is currently generating about 0.01 per unit of risk. If you would invest  4,251  in Sysgration on October 5, 2024 and sell it today you would lose (1.00) from holding Sysgration or give up 0.02% of portfolio value over 90 days.

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

Sysgration  vs.  IBASE Technology

Sysgration

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sysgration are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sysgration showed solid returns over the last few months and may actually be approaching a breakup point.

IBASE Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IBASE Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, IBASE Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Sysgration and IBASE Technology

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

The idea behind Sysgration and IBASE Technology 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.