Correlation Between ShippingOf India and Computer Age

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

By analyzing existing cross correlation between Shipping and Computer Age Management, you can compare the effects of market volatilities on ShippingOf India and Computer Age 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 ShippingOf India with a short position of Computer Age. Check out your portfolio center. Please also check ongoing floating volatility patterns of ShippingOf India and Computer Age.

Diversification Opportunities for ShippingOf India and Computer Age

0.91

Correlation Coefficient

ShippingOf India  Computer Age

Almost no diversification

The 3 months correlation between ShippingOf and Computer is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shipping and Computer Age Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Age Management and ShippingOf India 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 Shipping are associated (or correlated) with Computer Age. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Age Management has no effect on the direction of ShippingOf India i.e., ShippingOf India and Computer Age go up and down completely randomly.

Pair Corralation between ShippingOf India and Computer Age

Assuming the 90 days trading horizon Shipping is expected to generate 0.93 times more return on investment than Computer Age. However, Shipping is 1.08 times less risky than Computer Age. It trades about -0.27 of its potential returns per unit of risk. Computer Age Management is currently generating about -0.25 per unit of risk. If you would invest  23,428  in Shipping on December 2, 2024 and sell it today you would lose (8,834) from holding Shipping or give up 37.71% of portfolio value over 90 days.

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

Shipping  vs.  Computer Age Management

ShippingOf India

Risk-Adjusted Performance

Very Weak

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

Computer Age Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Computer Age Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ShippingOf India and Computer Age

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

The idea behind Shipping and Computer Age Management 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.