Correlation Between Scan D and Singatron Enterprise

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

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

Diversification Opportunities for Scan D and Singatron Enterprise

0.39

Correlation Coefficient

Scan D  Singatron Enterprise

Weak diversification

The 3 months correlation between Scan and Singatron is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Scan D and Singatron Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singatron Enterprise and Scan D 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 Scan D are associated (or correlated) with Singatron Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singatron Enterprise has no effect on the direction of Scan D i.e., Scan D and Singatron Enterprise go up and down completely randomly.

Pair Corralation between Scan D and Singatron Enterprise

Assuming the 90 days trading horizon Scan D is expected to generate 0.86 times more return on investment than Singatron Enterprise. However, Scan D is 1.16 times less risky than Singatron Enterprise. It trades about -0.04 of its potential returns per unit of risk. Singatron Enterprise Co is currently generating about -0.06 per unit of risk. If you would invest  3,475  in Scan D on December 25, 2024 and sell it today you would lose (100.00) from holding Scan D or give up 2.88% of portfolio value over 90 days.

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

Scan D  vs.  Singatron Enterprise Co

Scan D

Risk-Adjusted Performance

Very Weak

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

Singatron Enterprise

Risk-Adjusted Performance

Very Weak

Over the last 90 days Singatron Enterprise Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Singatron Enterprise 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 Scan D and Singatron Enterprise

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

The idea behind Scan D and Singatron Enterprise Co 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.