Correlation Between Sasken Technologies and HMT

Can any of the company-specific risk be diversified away by investing in both Sasken Technologies and HMT 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 HMT 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 HMT Limited, you can compare the effects of market volatilities on Sasken Technologies and HMT 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 HMT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sasken Technologies and HMT.

Diversification Opportunities for Sasken Technologies and HMT

-0.84

Correlation Coefficient

Sasken Technologies  HMT

Pay attention - limited upside

The 3 months correlation between Sasken and HMT is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sasken Technologies Limited and HMT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMT 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 HMT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMT Limited has no effect on the direction of Sasken Technologies i.e., Sasken Technologies and HMT go up and down completely randomly.

Pair Corralation between Sasken Technologies and HMT

Assuming the 90 days trading horizon Sasken Technologies Limited is expected to generate 1.18 times more return on investment than HMT. However, Sasken Technologies is 1.18 times more volatile than HMT Limited. It trades about 0.21 of its potential returns per unit of risk. HMT Limited is currently generating about -0.15 per unit of risk. If you would invest  151,305  in Sasken Technologies Limited on September 4, 2024 and sell it today you would earn a total of  69,915  from holding Sasken Technologies Limited or generate 46.21% return on investment over 90 days.

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

Sasken Technologies Limited  vs.  HMT Limited

Sasken Technologies

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sasken Technologies Limited are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady forward-looking signals, Sasken Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

HMT Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HMT Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Sasken Technologies and HMT

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

The idea behind Sasken Technologies Limited and HMT 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.