Correlation Between Sasken Technologies and Hardwyn India

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

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

Diversification Opportunities for Sasken Technologies and Hardwyn India

-0.68

Correlation Coefficient

Sasken Technologies  Hardwyn India

Excellent diversification

The 3 months correlation between Sasken and Hardwyn is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sasken Technologies Limited and Hardwyn India Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hardwyn India Limited and Sasken 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 Sasken Technologies Limited are associated (or correlated) with Hardwyn India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hardwyn India Limited has no effect on the direction of Sasken Technologies i.e., Sasken Technologies and Hardwyn India go up and down completely randomly.

Pair Corralation between Sasken Technologies and Hardwyn India

Assuming the 90 days trading horizon Sasken Technologies is expected to generate 9.43 times less return on investment than Hardwyn India. But when comparing it to its historical volatility, Sasken Technologies Limited is 17.33 times less risky than Hardwyn India. It trades about 0.08 of its potential returns per unit of risk. Hardwyn India Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,254  in Hardwyn India Limited on October 15, 2024 and sell it today you would lose (577.00) from holding Hardwyn India Limited or give up 25.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.39%
Values	Daily Returns

Sasken Technologies Limited  vs.  Hardwyn India Limited

Sasken Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sasken Technologies Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent forward-looking signals, Sasken Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Hardwyn India Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hardwyn India Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Sasken Technologies and Hardwyn India

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

The idea behind Sasken Technologies Limited and Hardwyn India 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.