Correlation Between Sify Technologies and InterDigital

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

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

Diversification Opportunities for Sify Technologies and InterDigital

0.8

Correlation Coefficient

Sify Technologies  InterDigital

Very poor diversification

The 3 months correlation between Sify and InterDigital is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sify Technologies Limited and InterDigital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterDigital and Sify 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 Sify Technologies Limited are associated (or correlated) with InterDigital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterDigital has no effect on the direction of Sify Technologies i.e., Sify Technologies and InterDigital go up and down completely randomly.

Pair Corralation between Sify Technologies and InterDigital

Given the investment horizon of 90 days Sify Technologies Limited is expected to generate 1.78 times more return on investment than InterDigital. However, Sify Technologies is 1.78 times more volatile than InterDigital. It trades about 0.16 of its potential returns per unit of risk. InterDigital is currently generating about 0.05 per unit of risk. If you would invest  289.00  in Sify Technologies Limited on December 30, 2024 and sell it today you would earn a total of  150.00  from holding Sify Technologies Limited or generate 51.9% return on investment over 90 days.

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

Sify Technologies Limited  vs.  InterDigital

Sify Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sify Technologies Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Sify Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

InterDigital

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in InterDigital are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, InterDigital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sify Technologies and InterDigital

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

The idea behind Sify Technologies Limited and InterDigital 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.