Correlation Between NetSol Technologies and Viking Holdings

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

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

Diversification Opportunities for NetSol Technologies and Viking Holdings

0.26

Correlation Coefficient

NetSol Technologies  Viking Holdings

Modest diversification

The 3 months correlation between NetSol and Viking is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding NetSol Technologies and Viking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Holdings and NetSol Technologies 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 NetSol Technologies are associated (or correlated) with Viking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Holdings has no effect on the direction of NetSol Technologies i.e., NetSol Technologies and Viking Holdings go up and down completely randomly.

Pair Corralation between NetSol Technologies and Viking Holdings

Given the investment horizon of 90 days NetSol Technologies is expected to under-perform the Viking Holdings. But the stock apears to be less risky and, when comparing its historical volatility, NetSol Technologies is 1.2 times less risky than Viking Holdings. The stock trades about -0.07 of its potential returns per unit of risk. The Viking Holdings is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  4,369  in Viking Holdings on December 19, 2024 and sell it today you would lose (470.00) from holding Viking Holdings or give up 10.76% of portfolio value over 90 days.

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

NetSol Technologies  vs.  Viking Holdings

NetSol Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days NetSol Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Viking Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Viking Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with NetSol Technologies and Viking Holdings

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

The idea behind NetSol Technologies and Viking 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 Transaction History module to view history of all your transactions and understand their impact on performance.