Correlation Between POWERGRID Infrastructure and Shigan Quantum

Can any of the company-specific risk be diversified away by investing in both POWERGRID Infrastructure and Shigan Quantum 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 POWERGRID Infrastructure and Shigan Quantum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between POWERGRID Infrastructure Investment and Shigan Quantum Tech, you can compare the effects of market volatilities on POWERGRID Infrastructure and Shigan Quantum 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 POWERGRID Infrastructure with a short position of Shigan Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of POWERGRID Infrastructure and Shigan Quantum.

Diversification Opportunities for POWERGRID Infrastructure and Shigan Quantum

0.26

Correlation Coefficient

POWERGRID Infrastructure  Shigan Quantum

Modest diversification

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

Pair Corralation between POWERGRID Infrastructure and Shigan Quantum

Assuming the 90 days trading horizon POWERGRID Infrastructure Investment is expected to under-perform the Shigan Quantum. But the stock apears to be less risky and, when comparing its historical volatility, POWERGRID Infrastructure Investment is 5.38 times less risky than Shigan Quantum. The stock trades about -0.05 of its potential returns per unit of risk. The Shigan Quantum Tech is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  11,800  in Shigan Quantum Tech on October 8, 2024 and sell it today you would earn a total of  100.00  from holding Shigan Quantum Tech or generate 0.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	75.41%
Values	Daily Returns

POWERGRID Infrastructure Inves  vs.  Shigan Quantum Tech

POWERGRID Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days POWERGRID Infrastructure Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, POWERGRID Infrastructure is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Shigan Quantum Tech

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shigan Quantum Tech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Shigan Quantum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with POWERGRID Infrastructure and Shigan Quantum

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

The idea behind POWERGRID Infrastructure Investment and Shigan Quantum Tech 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.

Check out your portfolio center.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.