Correlation Between F5 Networks and SSC Technologies

Can any of the company-specific risk be diversified away by investing in both F5 Networks 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 F5 Networks and SSC Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between F5 Networks and SSC Technologies Holdings, you can compare the effects of market volatilities on F5 Networks 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 F5 Networks with a short position of SSC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of F5 Networks and SSC Technologies.

Diversification Opportunities for F5 Networks and SSC Technologies

0.46

Correlation Coefficient

F5 Networks  SSC Technologies

Very weak diversification

The 3 months correlation between FFV and SSC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding F5 Networks 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 F5 Networks 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 F5 Networks 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 F5 Networks i.e., F5 Networks and SSC Technologies go up and down completely randomly.

Pair Corralation between F5 Networks and SSC Technologies

If you would invest  5,180  in SSC Technologies Holdings on October 15, 2024 and sell it today you would earn a total of  2,170  from holding SSC Technologies Holdings or generate 41.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

F5 Networks  vs.  SSC Technologies Holdings

F5 Networks

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days F5 Networks has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, F5 Networks reported solid returns over the last few months and may actually be approaching a breakup point.

SSC Technologies Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SSC Technologies Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SSC Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with F5 Networks and SSC Technologies

The main advantage of trading using opposite F5 Networks and SSC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if F5 Networks 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 F5 Networks 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.