Correlation Between Shigan Quantum and Sasken Technologies

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

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

Diversification Opportunities for Shigan Quantum and Sasken Technologies

0.35

Correlation Coefficient

Shigan Quantum  Sasken Technologies

Weak diversification

The 3 months correlation between Shigan and Sasken is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Shigan Quantum Tech and Sasken Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sasken Technologies and Shigan Quantum 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 Shigan Quantum Tech are associated (or correlated) with Sasken Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sasken Technologies has no effect on the direction of Shigan Quantum i.e., Shigan Quantum and Sasken Technologies go up and down completely randomly.

Pair Corralation between Shigan Quantum and Sasken Technologies

Assuming the 90 days trading horizon Shigan Quantum Tech is expected to under-perform the Sasken Technologies. In addition to that, Shigan Quantum is 1.27 times more volatile than Sasken Technologies Limited. It trades about -0.05 of its total potential returns per unit of risk. Sasken Technologies Limited is currently generating about 0.15 per unit of volatility. If you would invest  162,313  in Sasken Technologies Limited on October 22, 2024 and sell it today you would earn a total of  41,507  from holding Sasken Technologies Limited or generate 25.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.32%
Values	Daily Returns

Shigan Quantum Tech  vs.  Sasken Technologies Limited

Shigan Quantum Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shigan Quantum Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Sasken Technologies

Risk-Adjusted Performance

11 of 100

OK

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 unfluctuating forward-looking signals, Sasken Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shigan Quantum and Sasken Technologies

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

The idea behind Shigan Quantum Tech and Sasken Technologies 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.

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.