Correlation Between Electronic Systems and SatixFy Communications

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

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

Diversification Opportunities for Electronic Systems and SatixFy Communications

-0.4

Correlation Coefficient

Electronic Systems  SatixFy Communications

Very good diversification

The 3 months correlation between Electronic and SatixFy is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Systems Technology and SatixFy Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SatixFy Communications and Electronic Systems 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 Electronic Systems Technology are associated (or correlated) with SatixFy Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SatixFy Communications has no effect on the direction of Electronic Systems i.e., Electronic Systems and SatixFy Communications go up and down completely randomly.

Pair Corralation between Electronic Systems and SatixFy Communications

Given the investment horizon of 90 days Electronic Systems Technology is expected to under-perform the SatixFy Communications. But the pink sheet apears to be less risky and, when comparing its historical volatility, Electronic Systems Technology is 1.51 times less risky than SatixFy Communications. The pink sheet trades about -0.15 of its potential returns per unit of risk. The SatixFy Communications is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  70.00  in SatixFy Communications on August 31, 2024 and sell it today you would earn a total of  19.00  from holding SatixFy Communications or generate 27.14% return on investment over 90 days.

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

Electronic Systems Technology  vs.  SatixFy Communications

Electronic Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Electronic Systems Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SatixFy Communications

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SatixFy Communications are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, SatixFy Communications showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Electronic Systems and SatixFy Communications

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

The idea behind Electronic Systems Technology and SatixFy Communications 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.