Correlation Between Sky ICT and Betagro PCL

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

By analyzing existing cross correlation between Sky ICT Public and Betagro PCL, you can compare the effects of market volatilities on Sky ICT and Betagro PCL 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 Sky ICT with a short position of Betagro PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky ICT and Betagro PCL.

Diversification Opportunities for Sky ICT and Betagro PCL

-0.41

Correlation Coefficient

Sky ICT  Betagro PCL

Very good diversification

The 3 months correlation between Sky and Betagro is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sky ICT Public and Betagro PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betagro PCL and Sky ICT 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 Sky ICT Public are associated (or correlated) with Betagro PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betagro PCL has no effect on the direction of Sky ICT i.e., Sky ICT and Betagro PCL go up and down completely randomly.

Pair Corralation between Sky ICT and Betagro PCL

Assuming the 90 days trading horizon Sky ICT Public is expected to under-perform the Betagro PCL. In addition to that, Sky ICT is 1.63 times more volatile than Betagro PCL. It trades about -0.15 of its total potential returns per unit of risk. Betagro PCL is currently generating about 0.1 per unit of volatility. If you would invest  1,813  in Betagro PCL on December 20, 2024 and sell it today you would earn a total of  187.00  from holding Betagro PCL or generate 10.31% return on investment over 90 days.

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

Sky ICT Public  vs.  Betagro PCL

Sky ICT Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sky ICT 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 basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Betagro PCL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Betagro PCL are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Betagro PCL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sky ICT and Betagro PCL

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

The idea behind Sky ICT Public and Betagro PCL 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.