Correlation Between SASI Old and ARB IOT

Can any of the company-specific risk be diversified away by investing in both SASI Old and ARB IOT 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 SASI Old and ARB IOT into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for SASI Old and ARB IOT

-0.33

Correlation Coefficient

SASI Old  ARB IOT

Very good diversification

The 3 months correlation between SASI and ARB is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SASI Old and ARB IOT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARB IOT Group and SASI Old 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 SASI Old are associated (or correlated) with ARB IOT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARB IOT Group has no effect on the direction of SASI Old i.e., SASI Old and ARB IOT go up and down completely randomly.

Pair Corralation between SASI Old and ARB IOT

If you would invest  49.00  in ARB IOT Group on October 20, 2024 and sell it today you would earn a total of  6.00  from holding ARB IOT Group or generate 12.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.8%
Values	Daily Returns

SASI Old  vs.  ARB IOT Group

SASI Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SASI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, SASI Old is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

ARB IOT Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ARB IOT Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental drivers, ARB IOT sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SASI Old and ARB IOT

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

The idea behind SASI Old and ARB IOT 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.