Correlation Between Silgo Retail and FCS Software

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

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

Diversification Opportunities for Silgo Retail and FCS Software

0.21

Correlation Coefficient

Silgo Retail  FCS Software

Modest diversification

The 3 months correlation between Silgo and FCS is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Silgo Retail Limited and FCS Software Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FCS Software Solutions and Silgo Retail 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 Silgo Retail Limited are associated (or correlated) with FCS Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FCS Software Solutions has no effect on the direction of Silgo Retail i.e., Silgo Retail and FCS Software go up and down completely randomly.

Pair Corralation between Silgo Retail and FCS Software

Assuming the 90 days trading horizon Silgo Retail Limited is expected to generate 0.48 times more return on investment than FCS Software. However, Silgo Retail Limited is 2.07 times less risky than FCS Software. It trades about 0.01 of its potential returns per unit of risk. FCS Software Solutions is currently generating about 0.0 per unit of risk. If you would invest  3,886  in Silgo Retail Limited on December 10, 2024 and sell it today you would lose (25.00) from holding Silgo Retail Limited or give up 0.64% of portfolio value over 90 days.

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

Silgo Retail Limited  vs.  FCS Software Solutions

Silgo Retail Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silgo Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Silgo Retail is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

FCS Software Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days FCS Software Solutions 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 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 Silgo Retail and FCS Software

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

The idea behind Silgo Retail Limited and FCS Software Solutions 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.