Correlation Between ADEIA P and SSC Technologies

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

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

Diversification Opportunities for ADEIA P and SSC Technologies

0.01

Correlation Coefficient

ADEIA P  SSC Technologies

Significant diversification

The 3 months correlation between ADEIA and SSC is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ADEIA P 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 ADEIA P 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 ADEIA P 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 ADEIA P i.e., ADEIA P and SSC Technologies go up and down completely randomly.

Pair Corralation between ADEIA P and SSC Technologies

Given the investment horizon of 90 days ADEIA P is expected to generate 1.63 times less return on investment than SSC Technologies. In addition to that, ADEIA P is 2.67 times more volatile than SSC Technologies Holdings. It trades about 0.01 of its total potential returns per unit of risk. SSC Technologies Holdings is currently generating about 0.06 per unit of volatility. If you would invest  7,381  in SSC Technologies Holdings on August 31, 2024 and sell it today you would earn a total of  355.00  from holding SSC Technologies Holdings or generate 4.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

ADEIA P  vs.  SSC Technologies Holdings

ADEIA P

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ADEIA P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, ADEIA P is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

SSC Technologies Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SSC Technologies Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SSC Technologies is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ADEIA P and SSC Technologies

The main advantage of trading using opposite ADEIA P and SSC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADEIA P 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 ADEIA P 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.