Correlation Between Skkynet Cloud and Taoping

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

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

Diversification Opportunities for Skkynet Cloud and Taoping

-0.31

Correlation Coefficient

Skkynet Cloud  Taoping

Very good diversification

The 3 months correlation between Skkynet and Taoping is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Skkynet Cloud Systems and Taoping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taoping and Skkynet Cloud 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 Skkynet Cloud Systems are associated (or correlated) with Taoping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taoping has no effect on the direction of Skkynet Cloud i.e., Skkynet Cloud and Taoping go up and down completely randomly.

Pair Corralation between Skkynet Cloud and Taoping

Given the investment horizon of 90 days Skkynet Cloud Systems is expected to generate 2.9 times more return on investment than Taoping. However, Skkynet Cloud is 2.9 times more volatile than Taoping. It trades about 0.1 of its potential returns per unit of risk. Taoping is currently generating about -0.16 per unit of risk. If you would invest  55.00  in Skkynet Cloud Systems on December 29, 2024 and sell it today you would earn a total of  25.00  from holding Skkynet Cloud Systems or generate 45.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Skkynet Cloud Systems  vs.  Taoping

Skkynet Cloud Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Skkynet Cloud Systems are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward-looking signals, Skkynet Cloud showed solid returns over the last few months and may actually be approaching a breakup point.

Taoping

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taoping has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Skkynet Cloud and Taoping

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

The idea behind Skkynet Cloud Systems and Taoping 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.