Correlation Between SGF Capital and Project Planning

Can any of the company-specific risk be diversified away by investing in both SGF Capital and Project Planning 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 SGF Capital and Project Planning into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SGF Capital Public and Project Planning Service, you can compare the effects of market volatilities on SGF Capital and Project Planning 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 SGF Capital with a short position of Project Planning. Check out your portfolio center. Please also check ongoing floating volatility patterns of SGF Capital and Project Planning.

Diversification Opportunities for SGF Capital and Project Planning

0.87

Correlation Coefficient

SGF Capital  Project Planning

Very poor diversification

The 3 months correlation between SGF and Project is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SGF Capital Public and Project Planning Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Project Planning Service and SGF Capital 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 SGF Capital Public are associated (or correlated) with Project Planning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Project Planning Service has no effect on the direction of SGF Capital i.e., SGF Capital and Project Planning go up and down completely randomly.

Pair Corralation between SGF Capital and Project Planning

Assuming the 90 days trading horizon SGF Capital Public is expected to under-perform the Project Planning. In addition to that, SGF Capital is 1.06 times more volatile than Project Planning Service. It trades about -0.03 of its total potential returns per unit of risk. Project Planning Service is currently generating about 0.08 per unit of volatility. If you would invest  20.00  in Project Planning Service on September 27, 2024 and sell it today you would earn a total of  1.00  from holding Project Planning Service or generate 5.0% return on investment over 90 days.

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

SGF Capital Public  vs.  Project Planning Service

SGF Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SGF Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Project Planning Service

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Project Planning Service has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with SGF Capital and Project Planning

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

The idea behind SGF Capital Public and Project Planning Service 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.