Correlation Between Alpha One and SavMobi Technology

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

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

Diversification Opportunities for Alpha One and SavMobi Technology

-0.04

Correlation Coefficient

Alpha One  SavMobi Technology

Good diversification

The 3 months correlation between Alpha and SavMobi is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Alpha One and SavMobi Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SavMobi Technology and Alpha One 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 Alpha One are associated (or correlated) with SavMobi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SavMobi Technology has no effect on the direction of Alpha One i.e., Alpha One and SavMobi Technology go up and down completely randomly.

Pair Corralation between Alpha One and SavMobi Technology

Given the investment horizon of 90 days Alpha One is expected to generate 2.38 times less return on investment than SavMobi Technology. But when comparing it to its historical volatility, Alpha One is 2.4 times less risky than SavMobi Technology. It trades about 0.01 of its potential returns per unit of risk. SavMobi Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  43,400  in SavMobi Technology on October 7, 2024 and sell it today you would lose (43,125) from holding SavMobi Technology or give up 99.37% of portfolio value over 90 days.

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

Alpha One  vs.  SavMobi Technology

Alpha One

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpha One has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

SavMobi Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SavMobi Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, SavMobi Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpha One and SavMobi Technology

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

The idea behind Alpha One and SavMobi 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.