Correlation Between Power Finance and SECUREKLOUD TECHNOLOGIES

Can any of the company-specific risk be diversified away by investing in both Power Finance and SECUREKLOUD 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 Power Finance and SECUREKLOUD TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Power Finance and SECUREKLOUD TECHNOLOGIES LIMITED, you can compare the effects of market volatilities on Power Finance and SECUREKLOUD 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 Power Finance with a short position of SECUREKLOUD TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Finance and SECUREKLOUD TECHNOLOGIES.

Diversification Opportunities for Power Finance and SECUREKLOUD TECHNOLOGIES

-0.04

Correlation Coefficient

Power Finance  SECUREKLOUD TECHNOLOGIES

Good diversification

The 3 months correlation between Power and SECUREKLOUD is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Power Finance and SECUREKLOUD TECHNOLOGIES LIMIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECUREKLOUD TECHNOLOGIES and Power Finance 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 Power Finance are associated (or correlated) with SECUREKLOUD TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECUREKLOUD TECHNOLOGIES has no effect on the direction of Power Finance i.e., Power Finance and SECUREKLOUD TECHNOLOGIES go up and down completely randomly.

Pair Corralation between Power Finance and SECUREKLOUD TECHNOLOGIES

Assuming the 90 days trading horizon Power Finance is expected to generate 0.89 times more return on investment than SECUREKLOUD TECHNOLOGIES. However, Power Finance is 1.12 times less risky than SECUREKLOUD TECHNOLOGIES. It trades about 0.04 of its potential returns per unit of risk. SECUREKLOUD TECHNOLOGIES LIMITED is currently generating about -0.04 per unit of risk. If you would invest  38,841  in Power Finance on October 8, 2024 and sell it today you would earn a total of  7,639  from holding Power Finance or generate 19.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.18%
Values	Daily Returns

Power Finance  vs.  SECUREKLOUD TECHNOLOGIES LIMIT

Power Finance

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Power Finance are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Power Finance is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

SECUREKLOUD TECHNOLOGIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SECUREKLOUD TECHNOLOGIES LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, SECUREKLOUD TECHNOLOGIES is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Power Finance and SECUREKLOUD TECHNOLOGIES

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

The idea behind Power Finance and SECUREKLOUD TECHNOLOGIES LIMITED 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.