Correlation Between AUTHUM INVESTMENT and SIS

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

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

Diversification Opportunities for AUTHUM INVESTMENT and SIS

-0.16

Correlation Coefficient

AUTHUM INVESTMENT  SIS

Good diversification

The 3 months correlation between AUTHUM and SIS is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding AUTHUM INVESTMENT INFRASTRUCTU and SIS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIS LIMITED and AUTHUM 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 AUTHUM INVESTMENT INFRASTRUCTU are associated (or correlated) with SIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIS LIMITED has no effect on the direction of AUTHUM INVESTMENT i.e., AUTHUM INVESTMENT and SIS go up and down completely randomly.

Pair Corralation between AUTHUM INVESTMENT and SIS

Assuming the 90 days trading horizon AUTHUM INVESTMENT INFRASTRUCTU is expected to generate 1.98 times more return on investment than SIS. However, AUTHUM INVESTMENT is 1.98 times more volatile than SIS LIMITED. It trades about 0.13 of its potential returns per unit of risk. SIS LIMITED is currently generating about 0.0 per unit of risk. If you would invest  92,620  in AUTHUM INVESTMENT INFRASTRUCTU on October 11, 2024 and sell it today you would earn a total of  97,020  from holding AUTHUM INVESTMENT INFRASTRUCTU or generate 104.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	36.68%
Values	Daily Returns

AUTHUM INVESTMENT INFRASTRUCTU  vs.  SIS LIMITED

AUTHUM INVESTMENT

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AUTHUM INVESTMENT INFRASTRUCTU are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, AUTHUM INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SIS LIMITED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SIS LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with AUTHUM INVESTMENT and SIS

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

The idea behind AUTHUM INVESTMENT INFRASTRUCTU and SIS LIMITED 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..