Correlation Between Arctic Blue and Sdiptech

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

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

Diversification Opportunities for Arctic Blue and Sdiptech

0.61

Correlation Coefficient

Arctic Blue  Sdiptech

Poor diversification

The 3 months correlation between Arctic and Sdiptech is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Blue Beverages and Sdiptech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sdiptech AB and Arctic Blue 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 Arctic Blue Beverages are associated (or correlated) with Sdiptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sdiptech AB has no effect on the direction of Arctic Blue i.e., Arctic Blue and Sdiptech go up and down completely randomly.

Pair Corralation between Arctic Blue and Sdiptech

Assuming the 90 days trading horizon Arctic Blue Beverages is expected to generate 52.2 times more return on investment than Sdiptech. However, Arctic Blue is 52.2 times more volatile than Sdiptech AB. It trades about 0.32 of its potential returns per unit of risk. Sdiptech AB is currently generating about 0.11 per unit of risk. If you would invest  9.85  in Arctic Blue Beverages on December 3, 2024 and sell it today you would earn a total of  162.15  from holding Arctic Blue Beverages or generate 1646.19% return on investment over 90 days.

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

Arctic Blue Beverages  vs.  Sdiptech AB

Arctic Blue Beverages

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Arctic Blue Beverages are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Arctic Blue sustained solid returns over the last few months and may actually be approaching a breakup point.

Sdiptech AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sdiptech AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Sdiptech is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Arctic Blue and Sdiptech

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

The idea behind Arctic Blue Beverages and Sdiptech AB 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 Commodity Directory module to find actively traded commodities issued by global exchanges.