Correlation Between Sancus Lending and Made Tech

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

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

Diversification Opportunities for Sancus Lending and Made Tech

-0.58

Correlation Coefficient

Sancus Lending  Made Tech

Excellent diversification

The 3 months correlation between Sancus and Made is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sancus Lending Group and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech Group and Sancus Lending 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 Sancus Lending Group are associated (or correlated) with Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of Sancus Lending i.e., Sancus Lending and Made Tech go up and down completely randomly.

Pair Corralation between Sancus Lending and Made Tech

Assuming the 90 days trading horizon Sancus Lending is expected to generate 8.48 times less return on investment than Made Tech. In addition to that, Sancus Lending is 1.77 times more volatile than Made Tech Group. It trades about 0.01 of its total potential returns per unit of risk. Made Tech Group is currently generating about 0.22 per unit of volatility. If you would invest  1,500  in Made Tech Group on October 9, 2024 and sell it today you would earn a total of  975.00  from holding Made Tech Group or generate 65.0% return on investment over 90 days.

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

Sancus Lending Group  vs.  Made Tech Group

Sancus Lending Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sancus Lending Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sancus Lending may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Made Tech Group

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Made Tech Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Made Tech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sancus Lending and Made Tech

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

The idea behind Sancus Lending Group and Made Tech Group 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 Transaction History module to view history of all your transactions and understand their impact on performance.