Correlation Between SSC Technologies and Multilaser Industrial

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

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

Diversification Opportunities for SSC Technologies and Multilaser Industrial

0.65

Correlation Coefficient

SSC Technologies  Multilaser Industrial

Poor diversification

The 3 months correlation between SSC and Multilaser is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SSC Technologies Holdings, and Multilaser Industrial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multilaser Industrial and SSC 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 SSC Technologies Holdings, are associated (or correlated) with Multilaser Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multilaser Industrial has no effect on the direction of SSC Technologies i.e., SSC Technologies and Multilaser Industrial go up and down completely randomly.

Pair Corralation between SSC Technologies and Multilaser Industrial

Assuming the 90 days trading horizon SSC Technologies Holdings, is expected to generate 0.66 times more return on investment than Multilaser Industrial. However, SSC Technologies Holdings, is 1.52 times less risky than Multilaser Industrial. It trades about 0.17 of its potential returns per unit of risk. Multilaser Industrial SA is currently generating about 0.08 per unit of risk. If you would invest  6,678  in SSC Technologies Holdings, on December 24, 2024 and sell it today you would earn a total of  1,502  from holding SSC Technologies Holdings, or generate 22.49% return on investment over 90 days.

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

SSC Technologies Holdings,  vs.  Multilaser Industrial SA

SSC Technologies Hol

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SSC Technologies Holdings, are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SSC Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Multilaser Industrial

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Multilaser Industrial SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Multilaser Industrial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SSC Technologies and Multilaser Industrial

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

The idea behind SSC Technologies Holdings, and Multilaser Industrial SA 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.