Correlation Between Ichitan Group and Sappe Public

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

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

Diversification Opportunities for Ichitan Group and Sappe Public

-0.25

Correlation Coefficient

Ichitan Group  Sappe Public

Very good diversification

The 3 months correlation between Ichitan and Sappe is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ichitan Group Public and Sappe Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sappe Public and Ichitan Group 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 Ichitan Group Public are associated (or correlated) with Sappe Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sappe Public has no effect on the direction of Ichitan Group i.e., Ichitan Group and Sappe Public go up and down completely randomly.

Pair Corralation between Ichitan Group and Sappe Public

Assuming the 90 days trading horizon Ichitan Group is expected to generate 49.87 times less return on investment than Sappe Public. But when comparing it to its historical volatility, Ichitan Group Public is 1.41 times less risky than Sappe Public. It trades about 0.0 of its potential returns per unit of risk. Sappe Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  7,150  in Sappe Public on September 3, 2024 and sell it today you would earn a total of  800.00  from holding Sappe Public or generate 11.19% return on investment over 90 days.

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

Ichitan Group Public  vs.  Sappe Public

Ichitan Group Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ichitan Group Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Ichitan Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Sappe Public

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sappe Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Sappe Public may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ichitan Group and Sappe Public

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

The idea behind Ichitan Group Public and Sappe Public 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.